2004-02-13

[Stage Direction]
The House resumed from February 9 consideration of the motion.
Hon. Mauril Bélanger (Deputy Leader of the Government in the House of Commons, Lib.): Mr. Speaker, first, I would like to thank all my colleagues for their cooperation today. As expected, the House leaders of all parties came to an agreement on Tuesday.
Discussions have taken place between the parties concerning the taking of the division on the motion to refer Bill C-2 to committee before second reading, which is scheduled for right now. I believe that if you were to seek it you would find unanimous consent for the following:

That at the conclusion of today's debate on Bill C-2, if a recorded division is requested on the motion of referral to committee before second reading, the said vote shall be deferred until 5:30 p.m on Tuesday, February 17, 2004.

The Deputy Speaker: The House has heard the terms of the motion. Does the House give its consent to the motion?
[Intervention]
Some hon. members: Agreed.
(Motion agreed to)
Mr. Brian Masse (Windsor West, NDP): Mr. Speaker, it is a pleasure for me to rise today to address Bill C-2, an act to amend the Radiocommunication Act.
I had an opportunity to review some of the debate in which I took part earlier in the week and I want to make a few points.
First, I want to focus on and at least highlight the bill in terms of what it does for consumers and the telecommunications industry. The government rationale behind the bill is to protect investments made by the broadcasting industry and the integrity of the broadcasting system as a whole by fighting satellite piracy. To do so, the bill will target unauthorized dealers and the pirating of signals.
In particular, the government wants current changes it deems necessary to stop the sale and distribution of devices used to decode encrypted direct to home satellite signals without authorization. It is an excellent example of the government not taking the proper steps on an issue that is going to lead to confrontation in Canadian society and is the reason I do not support the bill being moved to committee at this time.
To be specific, the problem is that the bill is coming forward without dealing with the issue of satellite access to many cultural and other programs that are currently available abroad to different communities out there, providing those opportunities for people to purchase into the systems. They will now be further criminalized by the bill if they are accessing products and services that are not available legally in this country. I think the government should have been honest and should have actually worked on producing those access points for Canadians, be it for cultural or other types of programming for which people have been clamouring and which keeps them in connection with the community.
A report that came out of the Canadian heritage committee identified this issue. It was a report about the black and grey satellite market: “Maintaining a Single System”. In chapter 16 the committee recommended:

--that the CRTC permit Canadian broadcasting distribution undertakings to offer a wider range of international programming, while being respectful of Canadian content regulations.

Now the government has come forward with this bill, which will further criminalize people for keeping in touch with their cultural communities.
I noticed in Hansard that previous supporters of the bill seem to be falling back on the whole issue of protecting artists and broadcasting integrity in Canada to ensure that those individuals receive funds and the proper recognition they deserve for their products, and to encourage our Canadian culture to flourish. That is very suspect, with the government's past.
I want to be very clear about this. If a person is in the black market system and is stealing a signal that is legally available in Canada, we should stop that. We should have punishment for those individuals. Whether it is Bell ExpressVu, Shaw or whatever is currently available in Canada, it should not be an option for people to steal the signal and they should be punished accordingly for that. The problem is in that grey market where the services are not available. This also provides a good connection for individuals and communities to reach back to their former homelands, to have education and entertainment and that connection. Those individuals will now be further criminalized into that black market. I cannot support the bill for that reason.
The government is falling back on the whole notion that the bill will improve the access for artists to be able to receive funds and to make sure Canadian content prospers, but it is not really an improvement on its past practices. We recently had a motion put forward by the member for Dartmouth from our party which called for a tax deduction for artists. That would have been far better for those artists. The government voted against that and stopped the motion from going forward.
One of the main issues that we have to identify is how to provide people with the actual access to those cultural programs. In my community of Windsor, we have many people accessing programs which they would access in a legal way if they were provided the opportunity to do so. They could do so and pay into a system that supports Canadian culture. They would all be happy to do that and would support it.
We have to wonder where this issue is going. We look at the fact that Bell ExpressVu Canada and Shaw Communications have contributed over $320,000 to the Liberal Party and Paul Martin's leadership campaign--
Hon. Don Boudria: That is out of order.
Brian Masse: The Speaker has not ruled on that. You are no longer the House leader, thank you.
Don Boudria: Mr. Speaker, I rise on a point of order. Hon. members cannot refer to other hon. members this way. In particular, they cannot use their names on the floor of the House of Commons. I will leave the rest of the insults aside for a moment, but members are to refer to each other by name of riding.
I know perfectly well that I am not the House leader. That has nothing to do with it. It has to do with the unparliamentary language used by the hon. member across.
The Deputy Speaker: Let me see if I can be of assistance here. Certainly with regard to the practice of the House in terms of referring to one another, it is either by the portfolio one might carry or at the very least by naming each other's ridings respectfully. In terms of the contents, I will not engage in a debate, but certainly the practice as stated by the hon. member for Glengarry--Prescott--Russell is correct. I failed in paying close enough attention and I do regret that.
With the little time the hon. member for Windsor West has left, I know he will want to make sure that we complete this intervention without any further mishaps.
Brian Masse: Mr. Speaker, I apologize for that. I was reading off my notes and made an honest mistake. I took offence because I was being shouted down by another member of the House. I apologize for naming an individual. I should have said the former minister of finance, the member for LaSalle--Émard. I apologize for that.
To wrap up, I do want to impress upon members that before Bill C-2 moves forward we need to clear up the issue of access to grey market products. That is very important. That should be the very first step because it is important to build Canada through our cultural diversity. That is what connects many people to information abroad, whether it is English language programming, whether it is Christian programming, or whether it is Middle Eastern programming like Al Jazeera. All these things have been asked for at the CRTC but there has been no response.
The government needs to solve that first as opposed to further criminalizing people for making sure that they have those elements that are so important to their lifestyles. Quite frankly, it could be accessed through other mediums we already have, such as the Internet or as in other communities by putting up regular airwaves. This needs to be resolved right away before the government moves forward. Nothing else will do.
The Deputy Speaker: It is my duty to interrupt the proceedings at this time and put forthwith the question on the motion now before the House.
The question is on the motion. Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
[Intervention]
Some hon. members: No.
The Deputy Speaker: All those in favour of the motion will please say yea.
[Intervention]
Some hon. members: Yea.
The Deputy Speaker: All those opposed will please say nay.
[Intervention]
Some hon. members: Nay.
The Deputy Speaker: In my opinion the yeas have it.
And more than five members having risen:
The Deputy Speaker: Pursuant to order made earlier today, the division stands deferred until Tuesday, February 17 at 5:30 p.m.
Bill C-18. On the order: Government Orders

February 12, 2004—The Minister of Finance—Second reading and reference to the Standing Committee on Finance of Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.

Federal-Provincial Fiscal Arrangements ActHon. Aileen Carroll (for the Minister of Finance): moved:

That Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health be immediately referred to the Standing Committee on Finance.

Mauril Bélanger: Mr. Speaker, discussions have taken place between all parties and if you were to seek it, I think you would find consent of the House to adopt the following motion:

That if a recorded division is requested on the motion to refer Bill C-18 to committee before second reading, it be deferred to 5:30 p.m. on Tuesday, February 17, 2004.

The Deputy Speaker: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
(Motion agreed to)
Hon. John McKay (Parliamentary Secretary to the Minister of Finance, Lib.): Mr. Speaker, it is my pleasure today to rise on Bill C-18, an act respecting equalization and to authorize the Minister of Finance to make certain payments with respect to health, and to support the motion that the legislation be referred to committee.
The bill is designed to achieve two goals. First, the bill would enable the continuation of the equalization payments while the renewal legislation is being finalized. Second, the bill would provide the federal government with the authority to pay $2 billion to the provinces and territories for health, as confirmed by the Prime Minister following the first minister's meeting.
My hon. colleagues are aware that the federal government is in a partnership with the provinces and territories and it plays a key role in supporting the Canadian health system and social programs.
The large majority of federal transfers are delivered through four major programs: the CHST, the Canada health and social transfer; the equalization payments; the territorial formula financing; and the new health transfer.
The bill today only deals with equalization and CHST. However, collectively, those four programs actually represent 2.4% of the nation's GDP, a significant sum of money by anyone's standard and constitute 18% of the government's revenues.
The equalization program is a constitutional obligation that ensures that less prosperous provinces have the capacity to provide reasonably comparable public services according to their levels of ability. It is not a program that transfers wealth among citizens.
Payments are unconditional. Receiving provinces are free to spend the funds on public services according to their own priorities. Payments are calculated according to a formula set out in federal legislation. The formula responds to the changing economic fortunes and circumstances of each province. It is designed to measure a province's fiscal capacity relative to the average fiscal capacity of the five middle income provinces, which forms the threshold standard.
The formula puts 33 revenue sources in a basket to measure fiscal capacity. Each province's fiscal capacity is measured relative to the middle wealthy five provinces.
The formula is dynamic and, as revenues go up or go down over the year, the average moves as does the fiscal capacity of each province. If any province has a good year, that affects equalization and, conversely, if any province has a bad year, so also is equalization affected.
If a large province has a bad year, naturally there is a ripple effect. Population movement, as reflected in the 2001 census, also affects the flow of payments.
The good news is that over the past 20 years, with all the ups and downs of the nation's provinces, there has been a slow but steady narrowing in the fiscal disparities.
At the same time, equalization payments are subject to a floor provision, which provides protection to provincial governments against unexpected large and sudden decreases in equalization payments. The floor limits the amount by which a province's entitlements can decline from one year to the next.
Federal and provincial officials review the equalization program on an ongoing basis to make sure that differences in the capacity of provinces to raise revenues are measured as accurately as possible.
In addition, and central to today's debate, is the fact that equalization legislation is renewed every five years to ensure that this review is undertaken and that the integrity and fundamental objectives of the program are preserved. The last renewal was in 1999. The current legislation is set to expire on March 31, 2004.
Discussions on the full five year renewal of the equalization program are underway but may not be set by April 1, 2004, which would leave a gap in the government's authority to make equalization payments.
Briefly, the bill before us today would provide the Minister of Finance with the authority to continue to make the equalization payments according to the current formula for up to a year in the event that the new legislation is not ready before April 1.
The bill would ensure an uninterrupted stream of equalization payments following March 31. It is basically an insurance policy to ensure the continuation of payments while renewal legislation is finalized.
Passage of the bill would ensure that public services provinces fund through the equalization program will continue to be protected for the benefit of their citizens.
Of course, when passed, the renewal legislation would supercede this extension. When the full renewal legislation is passed it will be retroactive to April 1, 2004. The renewal legislation would ensure that the program remains up to date and that the best possible calculations and data are used to determine equalization payments.
As I indicated, until the renewal legislation is introduced and passed, hon. members should regard the measures in Bill C-18 as insurance to continue payments and minimize the impacts upon the receiving provinces.
I want to turn now to the other provision in Bill C-18, which is the Prime Minister's commitment to provide a further $2 billion to the provinces and territories for health.
As the largest federal transfer, the CHST provides provinces and territories with cash payments and tax transfers in support of health care, post-secondary education, social assistance and social services, including early childhood development and early learning and child care. It constitutes 1.7% of the nation's GDP.
Since the CHST was created in 1996, the federal government has strengthened the transfer numerous times and it will continue to be a key priority for the government.
Let me take a moment to review the major funding increases.
In September 2000, Canada's first ministers reached a five year health renewal agreement under which the federal government made its largest ever increase to the CHST. The September 2000 agreement provided $21.1 billion to the provinces and territories for health care and early childhood development, bringing CHST payments to their highest levels ever. To support the agreement, the federal government also provided an additional $2.3 billion in targeted advancements for medical equipment, primary care reform and new information technologies such as electronic patient records.
When that money came to the hospitals in my riding the CEO of that hospital identified information technologies as his critical need and, in some direct measure, the federal government responded to that.
Drawing on the commitments supporting reform and renewal outlined in 2000, the 2003 budget confirmed $34.8 billion in increased funding over five years to meet the goals outlined in the 2003 health accord.
As a result of the investments I have just outlined, in 2003-04 the federal will provide a total of $37.9 billion in support to the provinces and territories through the CHST.
That brings me to the second measure in the bill, which is the $2 billion from the consolidated revenue fund in 2003-04 for health.
Additional funding for health care was committed under the 2003 health accord where the government indicated that in an addition to $34.8 billion over five years, it would provide an additional $2 billion for health at the end of the fiscal year 2003-04 if the Minister of Finance determined during the month of January 2004 that there would be sufficient surplus above the normal contingency reserve to permit such an investment. The commitment was reiterated in the February 2003 budget and again in the November 2003 economic update.
This government intends to live up to that commitment. This money is in addition to the increased federal investment of $17.3 billion over three years and the $34.8 billion over five years already confirmed.
The passage of the bill before the end of the fiscal year will provide provinces and territories with the flexibility to begin drawing down these funds as they require, which will help them better plan for the future.
The bill would ensure that Canada's health care system continues to be, in the words of the Prime Minister, “A proud example of our national values at work”.
In considering the equalization measures of the bill, I urge hon. members to also keep in mind that the bill underscores the priority the government places on equalization and ensures uninterrupted funding until renewal legislation is in place. This would ensure that the receiving provinces continue to receive the resources they need.
I encourage hon. members to support the motion.
Mr. Loyola Hearn (St. John's West, CPC): Mr. Speaker, anybody who did not know the difference and who listened to what we just heard from the government member would think we have a wonderful government. It is giving all this money to the provinces and now, because it thought there might be some disruption in the program, it will extend the current program for another year.
Has this not been a very familiar ring in the Chamber over the last few months? The government is going to extend, going to put off, going to refer to the courts. When is the government going to make a decision on something? What more important decision can it make than on the equalization payments to the provinces?
The provinces have known for years that the present equalization payment agreement would end at the end of this fiscal year. They have been working extremely hard and have been placated by little bits and pieces.
The member says that the government is giving more in equalization payments than it ever did before. If people worked for me in 1970 and I paid them $5 an hour and I now give them $5.25 would I ask them why they were complaining since I was paying them more? We must look at the effect in real dollars. The provinces have been shafted entirely.
Let me read into the record what the Constitution says. Section 36(2) states:

Parliament and the Government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

It does not say comparable levels of service. It says reasonable, meaning close.
Perhaps we should look at some of the provinces we refer to as have not provinces. Why are they have not provinces? It is because we have not. The federal government takes it away.
One of the reasons we have to fight for equalization is to make sure we can provide these reasonably comparable levels of services. Can it be done? Let me be parochial and talk about Newfoundland and Labrador. Can we provide reasonably comparable levels of services? The answer is a blatant no.
Why is that? One just has to look at the geography of our province and the infrastructure necessary to deliver reasonably comparable levels of service to our people. Let us look at the health care funding, which the government has scuttled. The CHST payments have been reduced to almost non-existence despite the promises of an extra $2 billion that we have heard about for three years.
Most of the premiers come up and take the money begrudgingly and go home. However the bottom line is that they are worse off than they were before they took the money. We are not even close to keeping up with regular payments. In fact, at one time the provinces and the federal government shared the cost 50:50. Now some of the provinces are down to a 14% federal contribution. The burden is on the provinces and then, of course, it is on the municipalities and on the taxpayers and the services cannot be provided. Is this reasonably comparable? That is poppycock. Services are not reasonably comparable.
When we again look at the geography of Newfoundland and Labrador, or anywhere in rural Canada, can we provide reasonably comparable services under the present system? The answer is no.
What are the premiers looking for? The premiers and the ministers of finance are looking to the government to give them what the Constitution requires, nothing more and nothing less. They only want adequate funding to provide reasonably comparable levels of service.
What difference does it make to Newfoundland, under the present arrangement, where we see the average based upon not only five provinces, but which also excludes a number of different factors that affect what we would call equalization?
When look at the 10 provinces and we base it on equality, the difference to Newfoundland and Labrador is about $200 million annually. Where can we find that money? It is about the same amount as we have now seen wasted on the sponsorship program. Right now we are talking over $100 million, and every day we see other bits and pieces come out. With the sponsorship program alone, the money that has been squandered and covered up could have equalized the payments to Newfoundland and Labrador.
That $200 million is only 20%, or one-fifth, of the money spent on the gun registry. If we had taken the gun registry money alone, five provinces, like Newfoundland and Labrador, would have received proper and adequate equalization payments. It is incredible to think that the government blatantly can throw away such money.
The Liberals can go behind closed doors and in five minutes make a decision to bring in the foolish long gun registry that has wasted $1 billion. They can go behind closed doors and pass out $100 million to their friends. It is unbelievable. Yet they cannot, within two years, sit down with the provinces and come up with a reasonable agreement on equalization. This is completely and utterly unheard of.
What can they do to correct this inadequacy?
First, if they moved to the 10 province formula instead of the five province formula, it would be a major factor and it would help all the provinces.
Second, and more important, let us take this designation of have not away from the provinces by letting them develop their own resources. The development of natural resources and the economy generated by that should be taken out of the equalization formula if they are non-renewable resources. Let the provinces benefit from their own resources. If that happened, provinces like Nova Scotia and Newfoundland and Labrador and the developing north would do very well on their own. Not only would we be equal in the economic standards of the country, we would be contributing partners. We would not have other provinces complaining about paying more than their share, and perhaps rightly so. They would not have them dumping into the public purse to equalize provinces like ours. We would be able to pay our own way and help maybe a few provinces who could not.
The Liberals look at us, the new Conservative Party, and ask where our policies are. They will see them when we hit the campaign trail. However, I will tell them one right now. In relation to equalization, we would move to the 10 province formula for which all the provinces have asked. We would remove non-renewable natural resources from the equalization agreement which would give provinces that have these resources a chance to get on their feet and become contributing partners. Then the services across the country would be comparable. We would be contributors and would not be held subservient to a central government that just does not care.
Mr. Pierre Paquette (Joliette, BQ): Mr. Speaker, I am pleased to rise today to speak to this bill. I find it very symbolic and very representative of the kind of stunts this government, the Liberals and this Prime Minister seem to enjoy playing. Of course, this is to be expected just before an election. Bill C-18 is basically a partisan piece of legislation that goes against the interest of Quebec and the rest of the provinces.
First, in Bill C-18, two distinct components have been combined. The first one deals with extending the current equalization program that the provinces, and Quebec in particular, do not like and have been criticizing. The second one is to approve the $2 billion that was first promised to the provinces by Jean Chrétien and then by the former finance minister and that will probably be paid by the current Prime Minister.
On the one hand, we are against the extension of the current equalization program, because it penalizes Quebec and Atlantic Canada, in particular. On the other hand, we agree with the $2 billion for health promised by Jean Chrétien. The government thinks it can fool of us by coercing us to vote in favour of a bill that would penalize Quebec and Atlantic Canada over the next fiscal year. It is not fooling anyone, not the people of Quebec and not the Bloc Quebecois.
We demand that this bill be split. While we are in favour of Bill C-18 being referred to a committee, we will be bringing forward in committee an amendment to split the bill into two very distinct parts, as I mentioned earlier. So much for the first stunt.
Second, by introducing a bill that would extend the equalization program and provide an additional $2 billion for health, as promised over and over again, the federal government would have us believe that it is being very generous and that the provinces will be the big winners here. That is not true.
In this fiscal year alone, federal transfer payments to Quebec have been cut by about 5%. That means $423 million less in Quebec's coffers, even with the $2 billion, of which Quebec will receive $472 million.
We are not stupid. The federal government is financially starving the provinces, especially Quebec. Next year, if the equalization formula is maintained and if there is no agreement to increase health care funding, transfer payments to Quebec will drop by $1.55 billion. This is unacceptable. We will not allow Ottawa to financially starve the Quebec government at the expense of Quebeckers. We will not endorse this.
Third, the federal government is making a big deal about the $2 billion it is transferring for health care but has failed to mention that this year it will save $2 billion in equalization payments. That is the federal government's strategy: to take with one hand and give with the other. The problem is that the rules are not the same when it comes to equalization or the CHST.
The CHST is based on population percentage. Equalization, however, is based on the relative wealth of the provinces. Consequently, Quebec and the Atlantic provinces lose under Bill C-18. The proof is that, this year, under the equalization program, our share of the 2002-03 amount will drop 38%. These figures bear repeating because they are evidence of this third stunt pulled by the Liberals and the federal government.
The figures I am providing are from the study by Quebec's finance minister, Mr. Séguin, who is far from being a separatist, as the Liberals say, and who should have a certain credibility in their eyes. In 2002-03, under the equalization program, Quebec received $5.315 billion. In 2003-04, the current fiscal year, it received $3.29 billion. That is a 38.1% decrease. Projections for next year are approximately $3.5 billion. Compared to 2002-03, this is a 34.1% decrease.
And now they are trying to sell us on the idea of extending the current equalization formula at the expense of Quebec's finances. This is unthinkable.
Looking at the Canada health and social transfer, we see that in 2002-03 we received $2.648 billion. In 2003-04 we received $2.58 billion, a drop of 2.6%.
This year there is of course the increase provided for in the February 2002 agreement plus the $2 billion, which means for Quebec a total of $1.647 billion. And there is $1.367 billion in other transfers. So this year Quebec will receive in federal transfer payments $8.884 billion compared to the $9.3 received in 2002-03. That is a net loss of 4.5%.
They want the Bloc Quebecois, the sole defender of the interests of Quebec in this House, to accept such a unilateral reduction in transfer payments by the government. Next year, again compared to 2002-03, according to our very conservative estimate, the losses will be in the order of 16.7%.
We therefore cannot accept the sort of stunt they are trying to pull with Bill C-18, which will, when all is said and done, penalize Quebec and the Atlantic provinces in particular, as I have said, by strangling them financially.
We can see, since the numbers are there, that the basic intent of Bill C-18 is to allow the federal government to save money. The $2 billion—which, I will remind hon. members, is $2 billion with no guarantee of repetition next year, far from it—is merely an attempt to conceal what they are doing. This is why they have put the two elements into Bill C-18. But, once again, we are not taken in, nor are the people of Quebec.
Fourth, since there has been a new prime minister, since there has been a new finance minister, they have copied the tactics of the former finance minister, now Prime Minister.
They claim the financial situation is very difficult, pointing to examples of current issues that are indeed of great concern: the mad cow crisis, which the federal government should come up with more money for, the SARS crisis, and a number of other things such as the power outage in Ontario.
The government says finances will be very tight now. It expects to have a lot of difficulty raising $2.3 billion in surpluses. What did we learn this week? From April to December, the federal government already raised $5.2 billion. The surplus will be closer to $6 billion or $7 billion, as the Bloc Quebecois predicted earlier.
Consequently, the federal government put up a show to try to relieve the pressure on the negotiations concerning equalization and health. When he met with provincial premiers, the Prime Minister said, “I will not solve the problem now. I will wait until July”.
Why will he wait until July? Because he hopes to hold his election before then. Of course, I am not convinced that, with the current events, it will be easy. However, at the time, his idea was to call an election as soon as possible and postpone the problems.
It is the same with Bill C-18. The government does not want a debate, it does not want to negotiate the equalization formula with the provinces. It is downloading, hoping that the election will be held before then.
In an attempt to cover all this, it is pretending that it is having financial problems, which is false. Not only there are surpluses, but there is $6 billion sitting in the foundations that were created by the current Prime Minister.
We know that Jacques Léonard, the former president of the Treasury Board in Quebec, did a wonderful job for the Bloc Quebecois. He showed that the federal government had increased its spending at a pace that was double that of Quebec and Ontario, and that there was a lot of waste. It is not just the sponsorship scandal; there is also a culture of waste within the federal government. If things were tightened up, we would have ample means to settle the issue and negotiate quickly.
Fifth, all this is done with one goal in mind, which is to put all the problems off until after the election. Afterwards, the government will give the bad news to Quebec and to the other provinces.
We will not be fooled. We will not play this game. We will not condone what the Liberals want to do to the provinces and to Quebec in particular, which is to put a financial stranglehold on them and not deal with the fiscal imbalance.
Nor will we condone the laxness of this government, which could easily have negotiated the new equalization rules before March 31. We will not play this game and we will not support Bill C-18.
We hope that this bill will be split and that the issue of the $2 billion for health will be addressed separately.
As I said, we will ask that the $2 billion be a recurrent amount and that the equalization program be extended before March 31 if possible, but in any case before the election.
In conclusion, we will support the referral of this bill to the Standing Committee on Finance.
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, I am pleased to address Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.
I listened very carefully to the parliamentary secretary's comments on introducing Bill C-18. What we heard essentially was a bit of a historical account and a somewhat clinical recitation about equalization payments and the Canada health and social transfer which is a critically important part of the Canadian fiscal regime. In a way the parliamentary secretary's comments are significant not for what was included but for what was omitted.
He expressed concern and sounded ever so committed to the federal government keeping its fiscal and moral commitment to Canadians to ensure that regardless of which province people happen to live in they will be entitled to a roughly comparable level of service in the vital areas of health, education, child care and so on.
What the parliamentary secretary failed to say despite this show of concern is that the government has been so unwilling to see it as a priority to ensure not just that equalization payments continue but that there be a fair formula for equalization payments. The government has been dragging its feet and the current regime expires at the end of March. It has had five years to negotiate a renewal agreement that would be more fair and more effective.
What we are dealing with here is a stop-gap measure. We are dealing with a bill that is necessitated because the government has not seen it as enough of a priority to work in good faith with the provinces to put in place the new formula for equalization which is desperately needed and long overdue.
We know that the provinces have been working hard and in good faith to put forward a new formula. We heard from the parliamentary secretary about how the old formula works. What he did not say is that a very specific proposal has been brokered and worked on over a period of years that is based on a 10 provinces agreement and a 10 provinces formula.
The federal government has not been willing to come to an agreement about that new improved formula. Why? Despite the expression of concern about the inadequacy and deterioration of services across this country as a result of federal policies over the last 10 years, it seems content to continue using the same formula because it saves the government money. It needs to find ways to save money no matter whether it comes out of the hides of Canadians who are the most vulnerable in this country or wherever the government can find it because we know what the government's priorities are.
When the government decides that a corporate tax cut of $4.4 billion comes first, then no wonder it is avoiding entering into a good faith agreement with the provinces that would allow the equalization funds to be more adequate and more fair.
So much for the notion that the Prime Minister can claim that it is a new, different and better government. What we see by the introduction of this bill today is simply an admission of failure. It is a revelation of how vacuous the Prime Minister's claim is that he is a Prime Minister that has a much improved working relationship with our premiers.
There is more to having an improved working relationship with our premiers than going to a football game with the boys. There is no question it is a good photo op and it is smart to come out of the starting gate saying that he is getting together with the premiers so they can just get along better.
I would not presume to speak for any premier. However, I think one could say without fear of contradiction that the vast majority of the premiers would be a lot more impressed with the supposed commitment of the new Prime Minister to work in better harmony and good faith with them if the government had moved to endorse the 10 province formula. That formula was worked on over a very long period of time. If it could be in place so that it took effect April 1 we would not need this stop-gap legislation.
Let us make no mistake about it. It is not going to be missed on Canadians why this stop-gap legislation is needed. It is needed because when it comes to the fiscal regime and equalization, the new Prime Minister and the new finance minister have behaved no differently, no more responsibly, no more in response to the need for change by the provinces than the old regime, the previous finance minister and the old prime minister. And I do not mean old in years, I mean old in terms of chronology.
I want to refer to the second part of the bill which is to deal with the $2 billion that we hear trumpeted as a great achievement of the new Prime Minister. Let us not be that easily taken in by the notion that the $2 billion desperately needed for health care was an option and the Prime Minister might have said, “We are not going to do that after all because we do not have enough money”.
We have heard all the posturing from the new Prime Minister, the new finance minister and the other cheerleaders for the new regime. They are saying that they have to be fiscally responsible, that they may not have that $2 billion that was absolutely recommended as the rock bottom measure. That was the first measure needed to begin to make up for the money that was lost, that was clawed back by the federal government, that was held back from the health and social transfer over the last several years.
There was not an option, not unless the new government, the new Prime Minister and the new finance minister wanted to engage in a massive kamikaze effort here. It is clear that health care is the number one priority of Canadians. It is clear that the loss of those dollars at the insistence of the former finance minister, who now happens to be the Prime Minister, has very severely eroded the quality of health care, particularly in have not provinces like my own, Nova Scotia, and in the other six have not provinces. It has made it very clear that the provinces have to carry the load. They have to bear the burden of the elimination of much of the federal funding for health care over the last several years.
It is not surprising that the premier of Nova Scotia has said that the $2 billion clearly is not sufficient to deal with the horrendous waiting lists for specialist services and diagnostic services. It is not sufficient to deal with the log-jam at emergency hospital rooms. It is not sufficient to deal with the damage done over the last nine years because of the former finance minister's budgets.
What is absolutely clear is that even with the $2 billion granted, it does not begin to close the Romanow gap. When the Romanow report on the future of Canada's health care was presented, it was absolutely clear that there was a need for changes to the equalization formulas. There was a need to address many of the other aspects of the health care system which had been badly damaged by the government's misplaced priorities.
In conclusion, there is no indication whatsoever with Bill C-18 that the government is seriously committed to creating a fairer, more effective equalization regime. There is no indication that the government will begin to do what is needed to put in place the kind of health care system that Romanow recommended, that was put before the Canadian people. Health care remains the number one priority for Canadians.

Statements By Members
Auditor General's ReportHon. Paul Bonwick (Simcoe—Grey, Lib.): Mr. Speaker, I rise in the House today to pay praise and tribute to Auditor General Sheila Fraser, and to fully support our Prime Minister for his decisive actions in response to Ms. Fraser's report.
We recognize that without doubt there are those who have abused the public trust. As elected officials, we are privileged to serve our constituents who must have unquestioned confidence in our government. I can say that this elected official is deeply disturbed by Ms. Fraser's findings, as is this entire government.
Now is the time for strong leadership in the country and Prime Minister Paul Martin has displayed tremendous leadership by taking decisive and immediate action in response to the Auditor General's report.
Indeed, last fall, one of his first actions as Prime Minister was to cancel the sponsorship program. He has accepted all the Auditor General's recommendations concerning the sponsorship program. Moreover, he has pledged to take the necessary steps to uncover what happened to ensure those who are responsible are held to account.
The Deputy Speaker: First, I would hesitate to interrupt a member, particularly during statements by members, but clearly, as has already been indicated earlier today, we must recognize one another by portfolio or riding names, certainly not by any other.
Government of CanadaMr. Reed Elley (Nanaimo—Cowichan, CPC): Mr. Speaker, one of the reasons I ran for federal politics seven years ago was because I recognized that there was something seriously wrong in our democracy. Many have called it the democratic deficit, and I am not at all confident that this government has the moral fortitude to fully address this issue.
While in this House, I have witnessed far too many scandals. The billion dollar boondoggle in HRDC, the Shawinigate affair, another billion dollars or more wasted on the ill-fated gun registry, the hep C tainted blood scandal and I could go on.
Now the Auditor General has exposed perhaps the greatest scandal that this House has seen in many years. It appears that this Liberal government turned a blind eye to taxpayer money being funnelled through Liberal-friendly advertising agencies to outside groups and events. After taking their cut, they passed it on to Liberal-friendly businesses and one can only speculate where the rest of the money went from there.
The Prime Minister, who was then the minister of finance, wants us to believe that he did not know anything was going on. Canadians are not stupid. Now the Liberals have gone too far. Maybe this is the scandal that will send them packing at the next election. I can only hope so, because Canadians deserve an honest government for a change.
SafewayMr. Raymond Simard (Saint Boniface, Lib.): Mr. Speaker, since 1998 Canada Safeway stores have been selecting an annual charity to support as part of Safeway's “Because We Care” program. We were asked by our local Safeways to participate in this initiative by helping to provide volunteers and to help promote the fundraising activities.
This Saturday, February 14, is the “Show Your Heart” campaign where we will be on hand to support three local charities chosen by Safeway stores in my riding: Miriam Centre, a counselling centre for woman and children; Teen Stop Jeunesse, a drop in centre that offers basic needs to youth as well as adult education courses; and Jocelyne House, a local hospice for terminally ill patients.
More than 75 volunteers have agreed to support us in our efforts this coming Saturday. This confirms once again Manitoba's reputation as the volunteer capital of the world.
We thank Safeway and its employees, and we are pleased to support these charities and their organizers and volunteers who work relentlessly to improve the quality of life of citizens in our communities.
Royal Canadian Army Cadet LeagueMs. Marlene Catterall (Ottawa West—Nepean, Lib.): Mr. Speaker, this year the Royal Canadian Army Cadet League celebrates its 125th anniversary.
In celebration of that anniversary, last week I had the honour of attending and presenting a new Canadian flag to the 2870 Royal Canadian Dragoons Army Cadet Corps in my riding of Ottawa West—Nepean at the Connaught Rifle Range, along with Commanding Officer Captain Maureen Hayes. I also conducted an inspection of the corps.
I am delighted to note that the corps aims to develop leadership, citizenship and community involvement in young people between the ages of 12 to 18.
Just before flag day, I am especially pleased to remember the presentation of the flag and to congratulate the Royal Canadian Army Cadet League for 125 years of history.
Frostbite Music FestivalHon. Larry Bagnell (Yukon, Lib.): Mr. Speaker, the exciting winter warming activities in Yukon start this weekend with the Frostbite Music Festival, with fantastic talent from across Canada. This is followed shortly thereafter by the Yukon Quest, the world's longest international dog race. It goes a thousand miles from Yukon to Alaska, shortly to be followed, I hope, by a pipeline and a railroad.
We want to thank Agriculture Canada for its great work this year in helping to make this possible.
Finally, the celebrations reach a climax with the Yukon Sourdough Winter Carnival. Visit me in my traditional role as benevole at cabana a sucre.
To all members of Parliament and everyone in the gallery, they should pack their dog booties now, make their plane reservations and come to Yukon for this year's greatest winter carnival celebration.
Member for LaSalle--ÉmardMr. Rob Anders (Calgary West, CPC): Mr. Speaker, the new Prime Minister would have us forget that he was the kingpin in Jean Chrétien's game. He wants us to forget that he was responsible for over $1 billion being wasted on the gun registry. He was responsible for over $1 billion disappearing in the HRDC boondoggle. He is now responsible for over $100 million in kickbacks involving his Liberal friends in Quebec.
Are we now to believe that he had no recollection in the tainted blood scandal, no idea that his companies avoided Canadian taxes with tailor-made tax haven laws and no knowledge that Canada Steamship Lines received $161 million in corporate welfare? At best a fool, at worst a fraud. Canadians deserve better.
Innovation ProgramsMr. Robert Lanctôt (Châteauguay, Lib.): Mr. Speaker, the past decade has clearly demonstrated the major impact innovation can have on the strength of the economy.
When we think about innovation we often think about universities or research and development labs at large companies. However, innovation can occur in other places such as small businesses or colleges.
To showcase the innovations that might come out of these prolific sources, this government has mobilized partners and committed the necessary funds: some $3.6 million. Together with the Natural Sciences and Engineering Research Council and the Association of Canadian Community Colleges, an initiative was launched to help innovations get a foothold in the market.
Participating colleges could receive as much as $600,000 over three years to work with the private sector in order to market innovations quickly.
Rivière-des-Mille-ÎlesMr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ): Mr. Speaker, in my last householder I asked my constituents in Rivière-des-Mille-Îles for their opinion and comments on 10 hot topics. I was guided by the principle that, for the people to be sovereign, the elected representative must do what the people decide.
I must say I was pleasantly surprised at the high participation rate and I am encouraged and proud of the involvement of the people I represent. The statistics from this opinion poll are quite telling, and confirm the positions already taken by the Bloc Quebecois in this House on most issues.
I can assure the people of my riding that I will continue to represent them and strongly and faithfully defend them. I sincerely thank all those who support me in my political option.
Allow me to wish a happy birthday to my mother, who was born on Friday, February 13, 1913. Happy birthday Philomène.
Foreign CredentialsHon. Gurbax Malhi (Bramalea—Gore—Malton—Springdale, Lib.): Mr. Speaker, the current recognition and evaluation of foreign credentials is an issue that puts Canada in a unique predicament. We are a country recognized for our great resource base, multicultural population, universal respect and activities toward achieving and maintaining peace, and our highly developed infrastructure program.
It is therefore imperative that we work with the provinces and territories to see that the credentials of foreign immigrants are efficiently and fairly recognized. As a country, Canada stands to greatly benefit by the input of a world of great minds that provide a plethora of unique skills and training.
I am proud to rise today to provide my full support to see that this issue is given the support it requires. I would invite my colleagues in the House to help me communicate this message to all Canadians, as well as foreigners considering a life in Canada.
Youth Criminal Justice ActMr. Chuck Cadman (Surrey North, CPC): Mr. Speaker, on July 16, 2000, a 15 year old car thief ran a stop sign in Surrey and t-boned an SUV, killing 11 year old Tina Burbank. Her mother, Chrissy, and her grandparents were seriously injured. Chrissy has since founded Our Angels in Heaven, a support group for parents of children lost to violent crime.
Tina's killer was sentenced to 19 months, including six in secure custody, for criminal negligence causing death. At sentencing, Chrissy received a letter from him expressing sorrow and his desire to switch places with Tina.
Last week an 18 year old was charged with dangerous driving, flight, possession of stolen property and driving while prohibited in a case involving a stolen pickup truck. Even though he is 18, he cannot be identified. Why? Because to do so would name him as Tina Burbank's killer. So much for the crocodile tears and deterrence.
Chrissy is not surprised and holds out little hope for car thieves, because in her words, “They know nothing is going to happen to them”. Sadly, she is right because under this government's new Youth Criminal Justice Act, nothing will change. In fact it will in all likelihood get worse.
Brewing IndustryHon. Andrew Telegdi (Kitchener—Waterloo, Lib.): Mr. Speaker, Canada' s small breweries have been winning international quality awards for years. Their product variety and quality is exceptional. Their industry has as much potential as the Canadian wine industry had 10 years ago.
In 1984 there were only two small brewers in Canada. Today, my riding of Kitchener--Waterloo alone is home to two small breweries: Brick Brewery and Lion Beer Factory, with 85 more located in large and small communities across the country. They have added 2,000 jobs to Canada's brewing industry.
To promote more jobs in this sector, I ask the government to embrace in this year's budget the finance committee's recommendation from last year that states, “To reduce the excise tax for Canadian small brewers by 60% to achieve parity with U.S. small brewers”.
HomelessMs. Wendy Lill (Dartmouth, NDP): Mr. Speaker, homelessness is a national crisis in Canada, yet the attitude of the government has been to turn a blind eye.
In Dartmouth and Halifax almost 31,000, or 8% of the population, are on the brink of homelessness. A Halifax study has found many of these people are under 24 and many have disabilities.
High housing costs often mean choosing between paying the rent, buying food or getting prescriptions. Why are any of our citizens being forced to make such choices? Being homeless means thinking, “How can I get through the day?”, instead of, “How can I contribute to the society that I live in?”
These are some of our most vulnerable citizens, yet the callous attitude of the Prime Minister has been to cut the national housing program as finance minister and not appoint a secretary of state for housing.
I call on the Prime Minister to immediately put forth a national housing strategy and to devote 1% of the budget to housing.
Cégeps en spectacleMr. Marcel Gagnon (Champlain, BQ): Mr. Speaker, the 24th edition of the Cégeps en spectacle local finals at the Collège de Shawinigan has been a great success. More than 40 young people trod the boards of the auditorium, dancing, playing music, singing and juggling.
The judges, including actor Robert Brouillette, winner of the 1984 finals, were won over by three creative numbers in singing, music and dancing. Singer-songwriter-performer Lillianne Pellerin took first prize. Many volunteers contributed to the success of this cultural event, onstage and backstage, even operating the lights.
Many new talents have been discovered through this competition, including Sylvain Cossette, Denis Trudel, Jean-François Bastien. Cégeps en spectacle will continue to be a life changing and unforgettable experience for many generations of students.
Congratulations for 25 talented years of Cégeps en spectacle.
Canadian FlagDon Boudria: Mr. Speaker, this Sunday, February 15, is the 39th anniversary of the Canadian flag. This distinctive emblem is recognized the world over. It is a symbol of Canadian identity and a source of pride for every one of us.
On February 15, 1965, at the stroke of noon, the national flag of Canada was raised for the first time, right here on Parliament Hill. The Speaker of the Senate at that time said this:

The flag is the symbol of the nation's unity, for it, beyond any doubt, represents all the citizens of Canada without distinction of race, language, belief or opinion.

These words are just as meaningful today as they were then.
I hope that all Canadians will get together to celebrate Canada's flag on Sunday and will start planning even bigger and better celebrations for the 40th anniversary next year, on February 15, 2005.
Long live Canada.
Liberal Party of CanadaMr. Gerry Ritz (Battlefords—Lloydminster, CPC): Mr. Speaker, it is Friday the 13th, but the Liberal Party must feel like Bill Murray in Groundhog Day . Every morning, the same headlines proclaim its faults, and everyday it stumbles into a fresh gopher hole.
The Prime Minister claims to be a fresh face, but as fast as he blames his predecessor for scandals he signed off on, he sets a speed record for invoking closure to get the same old bills back on the Order Paper.
Platitudes concerning the democratic deficit are trumped by its actions once in power; a Liberal trademark.
On this unlucky day we are again reminded of billion dollar job creation schemes that instead created bankruptcies, billion dollar gun registry schemes that instead created a safe environment for criminals, and of course, a $3 billion Kyoto environmental scheme that has no plan.
We are also reminded of how true to form it is for Liberals to say one thing: encourage more women to run for Parliament and then do the other; encourage their attack dogs to eliminate the women they do not like.
If the Prime Minister gets through this day, I would suggest he go to Hamilton, on bended knee, on Valentine's Day and make up with his former--
The Deputy Speaker: The hon. member for Perth--Middlesex.
Stratford FestivalMr. Gary Schellenberger (Perth—Middlesex, CPC): Mr. Speaker, yesterday morning it was my great pleasure to sponsor a meeting concerning the Stratford Festival of Canada.
The Stratford Festival employs some 700 people and is responsible for contributing $125 million to the economy. The festival is world famous for its excellence in presenting Shakespearian classics and has taken a leadership role in offering new works illustrating the cultural mosaic of Canada.
The festival is truly a national performing arts organization. The stages at Stratford also serve to train young emerging Canadian actors and playwrights and prepare them for careers.
The federal government's matching endowment program is a very important and appreciated source of funding.
I want to thank the MPs representing multiple parties who took time out of their busy schedules to discuss this great Canadian institution.
I am proud to have the Stratford Festival of Canada located in the heart of my riding of Perth--Middlesex.

Oral Question Period
Government ContractsMr. Peter MacKay (Pictou—Antigonish—Guysborough, CPC): Mr. Speaker, the Prime Minister, despite his denials, was made aware of the mismanagement of the sponsorship program two years ago in a letter that came from the Liberal Party policy chair. True to form, he did nothing. He blamed an uneasy relationship with the former prime minister. In other words, he was competing for his boss's job and it made things a little uncomfortable, causing tension.
Why was the Prime Minister's personal ambition and rush to get to 24 Sussex put ahead of taxpayers' trust?
Hon. Ralph Goodale (Minister of Finance, Lib.): Mr. Speaker, the Prime Minister said yesterday that the gravity of the situation began to emerge in the early part of 2002.
Mr. Maharaj's letter was written in February 2002. The Groupaction matter was referred to the Auditor General in March. She reported in May and then proceeded to her more detailed examination. Obviously that is completely consistent with what the Prime Minister described yesterday.
Peter MacKay: Mr. Speaker, the more the Prime Minister claims he knew nothing, the more incompetent he looks. Was he on top of his department? Was he looking out for taxpayers' money? Or was he shamelessly working to get the prime minister's job? It appears that this political ambition, this naked ambition, took precedence over anything else.
The Liberal friendly firms that received millions of dollars in taxpayers' money were working for the Liberal Party. If the Prime Minister is serious about getting the money back, will the Liberal Party coffers pay that money back to the taxpayers and then will they go after those crooked firms?
Ralph Goodale: Mr. Speaker, in the announcements the Prime Minister made on Tuesday he indicated that we have already appointed a special legal counsel for the recovery of money. The credentials of Monsieur André Gauthier are absolutely above reproach. He has the full authority to follow the money trail wherever that trail may lead.
Peter MacKay: Mr. Speaker, those promises are about as thin and flexible as Flat Mark.
Crown corporation heads may roll, according to the Prime Minister. Among those on the chopping block should be BDC President Michel Vennat, who was part of a well orchestrated smear campaign against the former president, François Beaudoin.
A Superior Court judge said Beaudoin suffered “unspeakable injustice”, and Vennat's evidence at trial was rejected.
Will the Prime Minister ensure that a public inquiry will include in the terms of reference a review of the Auberge Grand-Mère file and, in the meantime, will they fire BDC President Michel Vennat?
Ralph Goodale: Mr. Speaker, in addition to the very broad terms for the public inquiry, the Prime Minister has already asked the President of the Treasury Board to examine into all matters related to crown corporations. As members of the House will know, the President of the Treasury Board is a very determined individual.
Mr. Monte Solberg (Medicine Hat, CPC): Mr. Speaker, we will find out about that.
Alfonso Gagliano is not the only high profile Liberal to come under the scrutiny of the Auditor General. The Auditor General also rips Canada Post for its role in the Liberal Party's dash for taxpayers' cash.
If Gagliano was fired for cause, my question is, why are there no consequences at all for André Ouellet, the head hack at Canada Post?
Hon. Stephen Owen (Minister of Public Works and Government Services, Lib.): Mr. Speaker, as we have been saying throughout this week, we are putting in place disciplined processes to come to grips with whoever may be culpable or be responsible for this mismanagement of public funds.
We are not going to determine that in the House. The appropriate place to determine responsibility, guilt, innocence and the ability to recover money is in the disciplined processes that have been established.
Any evidence against these gentlemen or anybody else should be brought to the public inquiry for people to give evidence under oath. They can also go to the public accounts committee, which is already sitting and looking into these matters. That is where it should rest.
Monte Solberg: Mr. Speaker, the government was very quick to pull the trigger on Gagliano, which we applaud, but why has it not done the same with André Ouellet? All the government has to do is look in the Auditor General's report. It is very clear.
André Ouellet ran the Liberal Party in Quebec for many years. He was even public works minister for a while. Now he is up to his ears in this scandal at Canada Post. If Gagliano was canned for his role in all of this, why is André Ouellet still pulling down $300,000 a year at Canada Post?
Hon. Stan Keyes (Minister of National Revenue and Minister of State (Sport), Lib.): Mr. Speaker, as the minister responsible for Canada Post, I can assure the hon. member that it has been made clear by the Prime Minister that whether it is André Ouellet or any other lead in any crown corporation with the Government of Canada, they will be appearing before the public accounts committee or they will be called before the public inquiry. And they have no option. They must appear.
Ms. Caroline St-Hilaire (Longueuil, BQ): Mr. Speaker, the Prime Minister swore with his hand on his heart that the public had the right to know how long he had known that confidence in him was at stake. He even solemnly declared that he became fully aware just this week, with the Auditor General's report, of the extent of the sponsorship scandal.
How can the Prime Minister, who was aware of the sponsorship scandal since February 2002 at least, as a letter that the Liberal Party policy chair sent him clearly shows, think today that he deserves—
The Deputy Speaker: I regret to interrupt the hon. member, but her time is up. The hon. Minister of Finance.
Ralph Goodale: Mr. Speaker, to repeat, the Prime Minister said yesterday that the gravity of the situation, going beyond merely administrative matters, began to emerge in the early part of 2002. That is when the letter in question was written, in February, I believe. The Groupaction matter was referred to the Auditor General in March. She began her investigation in April. She completed and reported the investigation in May and then she proceeded to her larger examination. Obviously this matter has been pursued very assiduously since then.
Caroline St-Hilaire: Mr. Speaker, in February 2002, Mr. Maharaj indicated in his letter to the Prime Minister that funds from the sponsorship program had been diverted for partisan reasons through communications firms associated with the Liberal Party of Canada.
Will the minister admit that the letter is quite clear about the extent of the sponsorship scandal and that, as a result, his Prime Minister knew about it since February 2002 at least, but he did nothing? So much for confidence.
Ralph Goodale: Mr. Speaker, indeed, in the early part of 2002 the government began to take the decisive action that was required. That included the reference to the Auditor General. She conducted her inquiry in April and May. She reported in May.
In May she indicated she would go further, referring some matters to the RCMP and conducting a government-wide examination of sponsorship and advertising issues. The Government of Canada cooperated every step of the way with the Auditor General to make sure that she could do her job properly.
Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Speaker, a LPC national chair confirmed, in his letter of February 2002 to the current Prime Minister, that already in December 2001, the party was talking of nothing but the sponsorship program and that he had received countless e-mail messages condemning the diversion of public funds to communications firms with ties to the Liberal Party.
How can the Prime Minister continue to maintain that he was completely unaware of this problem when the LPC hierarchy at all levels could talk of nothing else?
Ralph Goodale: Mr. Speaker, beginning with the work of the Auditor General that I have referred to earlier, there was additional action taken at the time. As the hon. gentleman will recall, the program was frozen. The private agencies were fired. The cases were referred to the RCMP. There was full, ongoing disclosure made to the Auditor General. Forensic experts were called in. The no-value flowthroughs to the crown corporations were stopped. We yanked some $3 million back from many of the impugned firms.
Benoît Sauvageau: Mr. Speaker, how can the Prime Minister continue to maintain that he knew nothing about the sponsorship scandal, when even the Minister of Finance has just told us everything his party did?
This is outrageous, and the Prime Minister must tell us what he knew and when he became aware of it.
Ralph Goodale: Mr. Speaker, the Prime Minister indicated that the fact that this matter went beyond mere administrative complaints or problems was coming to everybody's attention in the early months of 2002. The letter from Mr. Maharaj was part of that, as were the other public stories that were circulating.
The decisive information became available when the Auditor General was called in by the government. She then began to reveal the magnitude of scope of the issue, and decisive action--
The Deputy Speaker: The hon. member for Winnipeg--Transcona.
LobbyistsMr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker, they say that breaking up is hard to do. It has been an emotional week for everyone: Paul and Jean, Ken and Barbie. And I think that Ken and Barbie managed to break up with more dignity than the Prime Minister and the former prime minister.
I am more concerned, as we all should be, with the future to some degree. I want to ask the Minister of Finance about the possibility of future scandals as a result of the increasingly incestuous relationship between corporate lobbyists and the Prime Minister's Office.
I wonder if the Minister of Finance could tell us what the government is going to do about all the corporate lobbyists in the Prime Minister's Office. Is it not time that they hit the road, so to speak, so we do not have to worry about them being paid off in the future?
Ralph Goodale: Mr. Speaker, the Prime Minister indicated earlier this week, as he has throughout his political career, that he expects all of those who are associated with him to abide by the highest possible standards and we will all do our best to live up to those standards.
Bill Blaikie: Mr. Speaker, we do not know what those standards are because there are no standards with respect to how corporate lobbyists ought to relate to the Prime Minister's Office. They go in and out on a regular basis. It is like a revolving door. This is a cause for concern. The rules that apply to former civil servants do not seem to apply to corporate lobbyists.
I am asking the Minister of Finance, is he not concerned about this? Because if he is not, he should be. Will the government provide some rules for how these people should conduct themselves? Just telling us they are a bunch of great guys is not enough.
Ralph Goodale: Mr. Speaker, there are indeed codes of conduct that need to be adhered to. If the hon. gentleman has a specific example to give me or a specific complaint that he would like me to follow up, I undertake that I will do that.
Government ContractsMr. Rahim Jaffer (Edmonton—Strathcona, CPC): Mr. Speaker, we now learn that the sponsorship scandal continues to spread throughout the whole government. We have learned that companies involved in the scam have given money for the election campaigns of the health minister and the government House leader.
I want to know, in the spirit of openness and transparency, whether the Prime Minister will suspend these cabinet ministers during the public inquiry?
Stephen Owen: Mr. Speaker, donations to political parties and to political candidates are made on all sides of the House.
What the government has done, through its recent political financing legislation, is to significantly reduce almost to nothing the amount that corporate interests can give to political financing. Those donations are a matter of public record for members of all parties. That does not necessarily connect it to money that comes out of the sponsorship program.
However, if people have--
The Deputy Speaker: The hon. member for Edmonton—Strathcona.
Rahim Jaffer: Mr. Speaker, yesterday the Prime Minister said the real question was, what happened to the people who received the money? Some of those people are still sitting in his cabinet. Some of their campaigns received money from those sleazy Liberal ad firms.
Will the Prime Minister take action against his members or ministers who received this money, that was stolen from the public, through this scandal and funneled through their campaigns? Yes or no.
Stephen Owen: Mr. Speaker, this is going to a very low level of reasonableness. No connection has been shown between donations given to members of this party and sponsorship moneys.
If there is evidence of that, let us bring it forth to the inquiry. Let us give under oath the evidence we have. Let us have it looked at carefully. If there is evidence of that, bring it forward. That is why we have set up these processes. Let us get to the truth.
Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): Mr. Speaker, in 2000 the Liberals told Parliament the sponsorship program was managed with prudence and probity. That was a crock.
The Auditor General found that Parliament was misinformed about how the program was being managed. The Liberal minister signed a false report, misled Parliament, and was clearly in contempt of the House.
The Liberals have had the Auditor General's findings for months, but only now do they suddenly pledge to hold wrongdoers accountable. Why did it take a wave of public outrage for them to spring into action?
Stephen Owen: Mr. Speaker, it was not a wave of public outrage. It was knowledge and action within the government that led to the first decision of the government, on December 13, to cancel the sponsorship program because of the problems that had been indicated.
After that, we set up a whole series of processes by working with the Auditor General, tabling her report before the House, and putting together a series of processes probably unparalleled in Canadian political history in terms of public accounts, independent investigations--
The Deputy Speaker: The hon. member for Calgary—Nose Hill.
Diane Ablonczy: Mr. Speaker, hiding the truth from Canadians seems to be routine with these Liberals.
A year ago another Liberal minister was condemned by our courts for--surprise--misleading Parliament. As a reward, he has now risen to the post of president of the Queen's Privy Council. Then there is the Liberal minister who for two years hid from Parliament the fact that the gun registry had become a billion dollar quagmire. She is now Deputy Prime Minister.
Have Liberals kept quiet for months about sponsorship sleaze because so many ministers also have dirty hands?
Ralph Goodale: Mr. Speaker, I would remind the hon. member that decisive action on this file was taken throughout 2002 and 2003. I would remind her that the program was frozen. I would remind her that the advertising agencies were fired. I would remind her that a number of cases were referred to the RCMP.
I would remind her that there was full and complete disclosure to the Auditor General. I would remind her that forensic experts were called in to help evaluate the files, and that the no value flow throughs to the crown corporations were stopped and that $3 million was held back as a safeguard for the public.
Ms. Monique Guay (Laurentides, BQ): Mr. Speaker, the purpose of the letter the senior executive of the Liberal Party of Canada wrote to the Prime Minister was to tell him that funds had been misappropriated and, as finance minister and senior minister from Quebec, he had the ability to do something about it.
When a minister, now Prime Minister, knows something, has the ability to do something about it and deliberately does not act, then he is either guilty or complicit. Which is it?
Stephen Owen: Mr. Speaker, as the Minister of Finance, the former Minister of Public Works and Government Services, has mentioned, starting in 2002 when the evidence started to come in that this was beyond managerial incompetence or error, a number of steps were begun.
When Groupaction came to the attention of the government, the matter was referred to the Auditor General. References were made to the RCMP for that case. A government-wide audit was started by the Auditor General. Internal inquiries through independent forensic auditors also preceded the actions that have taken place this week.
Monique Guay: Mr. Speaker, he wrote that, in such a scandalous situation, patriotism must come before partisanship.
Will the Prime Minister admit that, in his actions, he chose the party and not the public interest?
Ralph Goodale: Mr. Speaker, as the Prime Minister has indicated in the House and outside, the facts of this matter, as they have been presented by the Auditor General, are absolutely appalling.
They are unacceptable to the government. We are determined to ensure that this matter is properly dealt with, both in investigating what went before and putting in place safeguards so that it shall never happen again.
Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Speaker, in his letter dated February 7, 2002, the senior executive of the Liberal Party of Canada warned the current Prime Minister that, if it were ever revealed that the party contributed to this loss of trust either through silence or indifference, the blow could be fatal.
Ignoring these warnings, did the Prime Minister not choose silence?
Stephen Owen: Mr. Speaker, there has been hardly any silence this week or since the government took action or indeed in the preceding two years.
Once these issues started to come to light, that there was something more than managerial incompetence, consistently and incrementally investigations have been held. References to the police have been made. Charges have been laid.
We have an array of processes, from the public accounts committee which is sitting this week, to the public inquiry, to the special council to recover funds.
The government has acted--
The Deputy Speaker: The hon. member for Saint-Hyacinthe—Bagot.
Yvan Loubier: Mr. Speaker, yesterday the Prime Minister set limits and reached conclusions: anyone who knew anything and did nothing should resign.
In light of the revelations contained in this February 7, 2002 letter, which confirms that the Prime Minister knew and did nothing, can he tell us what conclusion he will reach about himself?
Stephen Owen: Mr. Speaker, the government in which the current Prime Minister was finance minister started to take very aggressive action starting in 2002.
No one in the country can take issue with what the current Prime Minister has said. He has acted to find the facts, go after the money, hold people to account, bring people before the inquiry to give evidence under oath and be held accountable, whoever that might be.
Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC): Mr. Speaker, if the Prime Minister will not fire people like André Ouellet, Michel Vennat, and Jean Pelletier like he fired Gagliano, will he at least make them step aside until Canadians know the outcome of the inquiry?
Hon. Reg Alcock (President of the Treasury Board and Minister responsible for the Canadian Wheat Board, Lib.): Mr. Speaker, unlike the opposition, we prefer to have the verdict come after the evidence.
I have been asked by the Prime Minister to undertake a process to examine the adequacy of the responses of the affected crown corporations. I am doing so. I will report my findings to the Prime Minister soon and then they can be judged.
Cheryl Gallant: Mr. Speaker, why will the government not at least make these men step aside until the outcome of the inquiry is known to Canadians?
Reg Alcock: Mr. Speaker, the member may be aware that yesterday the Prime Minister, in his remarks, indicated that he had asked me to undertake a special investigation of the affected crown corporations.
I am doing so, but I will simply not act or make a judgment until I have sufficient evidence to do so.
Mr. John Reynolds (West Vancouver—Sunshine Coast, CPC): Mr. Speaker, the Prime Minister has said again and again that he had no knowledge of the sponsorship corruption. He was out of the loop. He was clueless every day and everywhere he travelled during his 13 year leadership campaign.
I would like to ask the Prime Minister a simple question. Is he still denying today that he has never once intervened personally on behalf of any advertising agencies to get them federal contracts in Quebec or anywhere else in Canada?
Ralph Goodale: Mr. Speaker, it is very clear that whenever any wrongdoing of any nature came to the attention of this minister or any other minister, we have taken the steps to deal with that immediately.
John Reynolds: Mr. Speaker, yesterday on the Terry Moore radio program in British Columbia, the member for Esquimalt—Juan de Fuca said that “The Prime Minister knew about this two years ago but his hands were tied”. What a catch this member was for the Liberals.
However, there is one question remaining. In 1994 the finance minister's executive assistance wrote a memo to the civil service with suggestions, from herself and the minister, of companies to be put on lists for future advertising contracts.
Will the Prime Minister stand today and deny that the memo from his executive assistance was written without his knowledge or without his permission?
Ralph Goodale: Mr. Speaker, I have no knowledge of the document the hon. gentleman is referring to. If he would care to share a copy with me, I will look at it.
HealthDon Boudria: Mr. Speaker, I have a real question for the government this morning. My question is for the Minister of Health. Canadians are concerned about their health and about contagious diseases. After the SARS crisis, which hit my province of Ontario particularly hard, the media are now reporting on avian flu, or chicken flu, as they are calling it in Europe.
What is the Minister of Health prepared to do to protect the health of Canadians?
Hon. John McCallum (Minister of Veterans Affairs, Lib.): Mr. Speaker, I thank the hon. member for his excellent question.
On behalf of the health minister, I would like to reassure Canadians that we do not face any immediate threat of a pandemic.
Yesterday the Minister of Health and Minister of State for Public Health announced the Canadian pandemic influenza plan as a proactive measure to help protect Canadians in the event there is an influenza pandemic.
Together with the provinces and territories and over 200 health experts, we have created a plan that will guide the actions of all levels of government and assist all--
The Speaker: The hon. member for Windsor West.
Government ContractsBrian Masse: Mr. Speaker, the government has a hard time understanding what is right or wrong. One clear wrong was its decision to tender the Canada census to Lockheed Martin, an American-based weapons dealer. Maybe it likes something in the name of the Pentagon's number one arms pusher and star wars champion.
I ask the Minister of Finance, will he do the right thing, cancel this contract, bring this work back to Canada, protect our privacy, and not pay off another Liberal corporate friend?
Stephen Owen: Mr. Speaker, as I am sure the hon. member knows, contracts such as this are tendered competitively. Lockheed Martin has a Canadian subsidiary which bid competitively and won this contract.
The appropriate concern with respect to Canadian privacy and the taking of the census will be observed in this contract as it has in any previous census in the past.
TaxationMr. Pat Martin (Winnipeg Centre, NDP): Mr. Speaker, all Canadians hope that these crooked Liberal advertising firms will be prosecuted and fined to the fullest extent of the law. However, happily for them, Canada is the only country in the free world that allows businesses to deduct their fines from their income tax. The Liberals have consistently refused to plug this outrageous tax loophole.
I ask the new Minister of Finance, will he change the Income Tax Act so that not another tax season goes by where breaking the law is tax deductible?
Ralph Goodale: Mr. Speaker, I believe a very credible case can be made on the basis of the common laws that presently stand that the type of behaviour that the hon. gentleman refers to is already non-deductible.
I know that he has a private member's bill before the House that is proposing a remedy with respect to this matter. I am looking at it very closely. I want to assure him I have it under active consideration.
Government ContractsMr. Jay Hill (Prince George—Peace River, CPC): Mr. Speaker, we have heard what politicians think about this sponsorship scandal but let us listen to what Canadians out in the real world think about it.
In a letter to the editor published in yesterday's National Post , a Toronto resident, Neil Macdonald, wrote:

Today I wrote my first letter ever to my Member of Parliament. The message was simple: After years of waning support for the Liberal Party of Canada, my confidence has been unrepairably shattered by Auditor-General Sheila Fraser's report....

Why should Canadians trust the Prime Minister to run their country when he failed so miserably to protect their tax dollars when he was finance minister?
Ralph Goodale: Mr. Speaker, the Prime Minister and all members of the government share the distress of Canadians, as the hon. gentleman has referred to. We are determined that this matter will be dealt with decisively. We have launched a series of processes now to make sure that the past is properly addressed and the future is safeguarded in such a way that this cannot occur.
Jay Hill: Mr. Speaker, the Prime Minister searching for those responsible for this scandal is like O.J. Simpson searching for the murderer.
The sponsorship scandal also prompted Roger Derenzis from Gloucester, Ontario to write to the Ottawa Citizen . He states:

What will be the end result of this probe? It will again prove that this Liberal government is a group of misfits and incompetents who are not entitled to run the affairs of this country.

I could not have said it better myself. Whether it is incompetence or complicity, when will the Prime Minister act like a real Prime Minister and take responsibility for his role in this?
Stephen Owen: Mr. Speaker, responsible government requires that governments, when they find something has gone wrong, act quickly and appropriately to deal with it. It is not by jumping to conclusions and firing people without the evidence, but by setting up processes, forensic audits, internal audits, references to the Auditor General, setting up public inquiries, referring matters to the public accounts committee and hiring special counsel to go after finances that have gone astray.
Equalization PaymentsLoyola Hearn: Mr. Speaker, cases of Birks watches purchased by the then minister Gagliano have been found in storage. However the minister did not buy them directly from Birks. He had Groupaction buy them and he paid them a fee of $16,000.
It does not take a Birks watch to tell that time is running out on this government, but time is also running out on the equalization agreement.
Why does the Prime Minister not make a deal with the provinces now rather than postponing it until after the election, as he is doing with everything else?
Ralph Goodale: Mr. Speaker, we are taking two immediate steps with respect to equalization. First, there is legislation before the House right now to allow the existing equalization formula to continue if it physically cannot be renewed by March 31. We are also in active discussions with the provinces on the renewal process.
I will be meeting with all of the provinces at the end of next week to see if we can in fact finalize our renewal arrangements with respect to equalization.
Loyola Hearn: Mr. Speaker, we will watch that closely.
Seven years ago only two provinces were not accessible by the Trans-Canada Highway, Prince Edward Island and Newfoundland. Today only Newfoundland needs a ferry service, which should be treated as the extension of the Trans-Canada Highway.
The cost of getting to P.E.I. by the fixed link has gone up over the last five years by 11%. To get to Newfoundland by ferry costs an additional 30%.
In light of the money squandered through the sponsorship program by the Liberal government, how can it justify putting this extra burden on the shoulders of the people of Newfoundland and Labrador?
Hon. Jim Karygiannis (Parliamentary Secretary to the Minister of Transport, Lib.): Mr. Speaker, the Prime Minister has clearly stated that a public inquiry will be held in everything that has happened; that we will hold those responsible to account to recover lost funds; that we will strengthen transfer accountability and management across the public sector; and that we will get answers to the remaining questions.
The hon. member has raised a good issue. We will take it under advisement and get back to him.
Employment InsuranceMrs. Suzanne Tremblay (Rimouski—Neigette-et-la Mitis, BQ): Mr. Speaker, each month, the media tell us about new cuts that are caused, among other factors, by the Asian competition, when it is not whole plants that are shutting down. For example, Drummondville lost 600 jobs, while in Contrecoeur 180 seamstresses will lose their livelihood.
Does the Minister of Human Resources and Skills Development intend to create a special program for older workers who cannot necessarily retrain easily?
Hon. Joseph Volpe (Minister of Human Resources and Skills Development, Lib.): Mr. Speaker, the employment insurance program seeks to provide temporary income support, promote greater participation in the employment market, and help families strike a balance between professional and family responsibilities.
I am pleased to announce that 88% of all the workers who are on the market qualify for benefits when—
The Deputy Speaker: The hon. member for Rimouski--Neigette-et-la Mitis.
Suzanne Tremblay: Mr. Speaker, the pilot project initiative for older workers that was signed by Quebec and Ottawa on October 4, 2000, has resulted in the completion of 55 projects in 13 regions, between October 2000 and March 2004.
Is the Minister of Human Resources and Skills Development prepared to extend this program for another year, as his Quebec counterpart is asking him to do?
Joe Volpe: Mr. Speaker, I have yet to speak to my Quebec counterpart, but it is always a pleasure for me to point out how successful our department's programs are.
For example, we are spending $8 billion in regular benefits, almost $3 billion in benefits transferred to the provinces for these initiatives, and $2 billion in benefits for special cases. There is also $47 million for—
The Deputy Speaker: The hon. member for Vancouver Island North.
Organized CrimeMr. John Duncan (Vancouver Island North, CPC): Mr. Speaker, the RCMP in British Columbia have described the spread of organized crime as a cancer eating away at the moral fabric of British Columbia society. This was after January raids of the B.C. legislative offices of two of the Prime Minister's organizers.
The province has fired and suspended these two individuals. Why are they still working for the Prime Minister?
Ralph Goodale: Mr. Speaker, as the hon. gentleman knows, the police are very much at work on this file. If it turns out that someone, anyone, did anything that was either wrong or inappropriate, the proper consequences will follow.
John Duncan: Mr. Speaker, the government is doing everything it can to distance itself from people who were directly connected with the federal Liberal Party in the province of British Columbia.
The culture of corruption the government created is designed to reward Liberal friends across the country. Why are these two individuals, who were removed from the B.C. provincial payroll, still working for the Prime Minister?
Ralph Goodale: Mr. Speaker, to the best of my knowledge, neither of the individuals are on any staff of the Prime Minister.
AgricultureMr. Gerald Keddy (South Shore, CPC): Mr. Speaker, in all this scandal, one issue has floated to the top. The Prime Minister has put his personal ambition ahead of the public trust. It forever reminds me of a big bullfrog just jumping from one scandal ridden lily pad to the next as it sinks underneath it.
According to the same Prime Minister, there is no money out there to help farmers affected by BSE but he found $250 million to help his Liberal friends.
Ralph Goodale: Mr. Speaker, I would remind the hon. gentleman that over the last number of months the government has invested the better part of $500 million in initiatives to deal with BSE. Officials with the Department of Agriculture spent all day yesterday in consultations with the Canadian Cattlemen's Association to determine what further might be required.
Gerald Keddy: Mr. Speaker, if the government were to convict everybody who was guilty in this scandal it would not have enough left for a four-handed game of 45.
I ask those members to just look at themselves. They are an embarrassment, an absolutely incredible embarrassment to the history of this nation.
It is incredible that the government feels that it is acceptable to launder $250 million toward Liberal lackeys while neglecting its duties to other Canadians.
The Minister of Finance is not too busy trying to ward off the Liberal sponsorship death--
The Deputy Speaker: Order, please. The hon. Minister of Finance.
Ralph Goodale: Mr. Speaker, in all that outburst there was not in fact a question.
I would simply point out to Canadians that the Government of Canada is absolutely determined that this matter will be thoroughly ventilated from top to bottom and the consequences will fall wherever the consequences should be. We will follow the trail and deal with this matter decisively. All the processes are in place to do that.
In the meantime, I am working very hard on a budget that will meet the expectations of Canadians.
Employment InsuranceMr. Paul Crête (Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, BQ): Mr. Speaker, in the coming weeks, 600 employees of Whirlpool in Montmagny are going to be laid off. Of that number, 150 are 50 years of age or more, and most of them have paid into employment insurance for over 20 years.
Can the Minister of Human Resources Development give us his assurance today that these people will be able to benefit from a real assistance program? It is a matter of justice.
Joe Volpe: Mr. Speaker, when a situation such as the one described by my colleague arises, obviously the employers and employees attempt to resolve the problem together. As for my department's involvement, we are there to provide all the benefits available under our employment insurance program.
Government ExpendituresAlexa McDonough: Mr. Speaker, last night we were treated to a disgusting show by Conan O'Brien, with offensive racist jokes full of stereotypes and hate, and what is more, funded by public money.
My question is simple. Will the government demand reimbursement of the federal dollars used to produce this hodgepodge of stupidity, and if not, why not?
Mauril Bélanger: Mr. Speaker, we take note of the question because we also wish to disassociate ourselves from the comments broadcast last night. We do not condone them in any way.
As for the funding for this program, it is one of the programs to help the city of Toronto get over the difficulties it experienced during the SARS crisis. We had no particular say over the exact use of these funds, but we completely dissociate ourselves from the comments broadcast yesterday.
Auditor General's ReportGerry Ritz: Mr. Speaker, the Auditor General's bombshell report this week contained enough evidence for the government to fire Alfonso Gagliano and demand his return. Yet that same report was just as scathing about Messrs. Quellet and Pelletier and the government will not act in that regard. Why the double standard?
Reg Alcock: Mr. Speaker, I think the member should read the Auditor General's report.
The Auditor General very specifically outlined actions that were taken or were deemed to have been taken by the former minister that called into question the decisions that he made in his responsibility, and on that the Prime Minister acted.
The Prime Minister has also asked me to meet with each one of the crowns, to do an examination of their responses, assess what action they have taken and how seriously it was taken and to make a recommendation on whether we continue to have confidence in them.
Budget SurplusPierre Paquette: Mr. Speaker, the premiers of the Atlantic provinces and Quebec's finance minister have noted that the old tactics instituted by the Prime Minister when he was Minister of Finance are still in use. The size of the surplus is being underestimated in order to keep it all for the debt, or, probably, for election promises.
Will the federal finance minister make a commitment—as the provincial premiers and the Quebec finance minister have asked—to make the $2 billion for health a recurring amount, now that we know the surplus will be twice as large as predicted?
Ralph Goodale: Mr. Speaker, the government will obviously honour its obligation with respect to the $2 billion for health care. That is now enshrined in legislation before the House.
As I indicated in the response to an earlier question, I am now in discussions with the provinces and territories about the renewal of equalization, a new formula that will come into effect as of April 1 this year.
Government ContractsGerry Ritz: Mr. Speaker, the Prime Minister and his cronies all this week have had very distinct memories for what they did not do but have had a real memory loss as to what and when they knew anything.
Do the Liberals expect Canadians to fall for this ignorance is bliss defence they are putting up?
Ralph Goodale: Mr. Speaker, the government has worked very assiduously on these files. I have outlined a number of steps in the course of question period today. Most decisively, on the first day that this government came into office the program was cancelled. Within five minutes of the Auditor General's report the corrective initiatives were underway.
Auditor General's ReportYvan Loubier: Mr. Speaker, the Auditor General has raised some very serious problems relating to transparency in the process of awarding contracts for first nations management by non-aboriginal third-party managers or co-managers, once again opening the door to abuse, favouritism and corruption.
Will the Minister of Indian and Northern Affairs put an end to this laxness immediately and, above all, will he release the names of the management firms under contract to the department, along with the amounts involved?
Larry Bagnell: Mr. Speaker, the amount of money that goes to first nations for managers is public record.
LobbyistsMs. Libby Davies (Vancouver East, NDP): Mr. Speaker, earlier in question period the finance minister said he was willing to entertain specifics about the corporate lobbyists and their ties to the Prime Minister's Office or people who have worked for it. Let us get specific.
What about Francis Fox? What about his role in the Prime Minister's Office and telecommunications? What about Mr. Duffy who is now acting as a lobbyist on Stelco and is getting paid to open the door to the Prime Minister's Office? Does he think this is ethical? Why are there no rules established to protect us from this kind of corporate cronyism with the Prime Minister's Office? It is outrageous.
Ralph Goodale: Mr. Speaker, in typical NDP fashion, throw as much against the fan and see how it splatters.
The point of the matter is, besides the hon. member's broadside, if she would simply like to make a specific complaint, a specific allegation, let us hear it. Let us hear it not just inside the House but outside as well.
Government ContractsMr. John Williams (St. Albert, CPC): Mr. Speaker, it is reported in the media today that in February 2002 a letter was sent to the Prime Minister, who was then the minister of finance, by the Liberal Party's then national policy chair, asking him to prepare a fact based reply to the growing rumours that funds from the sponsorship program were being diverted through advertising firms closely linked to the Liberals.
Did the Prime Minister as the minister of finance respond to that letter and if so, can it be tabled in the House?
Stephen Owen: Mr. Speaker, I am not sure whether there was a reply but that can be taken under advisement.
The letter that is being referred to is completely consistent with the knowledge in early 2002 where issues with the sponsorship program were brought to the fore. Reference was made to the Auditor General and action was taken, including the removal of the minister of public works at that time.
Points of OrderPeter MacKay: Mr. Speaker, I want to commend you for having operated such a streamlined question period that we got two additional questions today.
In the House of Commons this week my colleague from St. John's West rose at the end of question period to bring to the House's attention a concern that he had about the reintroduction of bills.
This week in the House a number of bills were reintroduced. I will not speak to the fashion in which those bills came back. Specifically, at page 439 of Hansard the member for St. John's West rose to bring the Chair's attention to the fact that he wanted the government to be vigilant in the reintroduction of those bills. He was looking for assurances from the government House leader that the bills would be brought back in the proper form. The member was asking that they not be tampered with and that they be presented in the original form.
I refer to page 440 where the House leader responded that yes and in fact on Bill C-4, he said:

Mr. Speaker, pursuant to the special order made previously, I would like to inform the House that this bill is in the same form as Bill C-34 was in the previous session at the time of prorogation.

The Speaker then responded:

The Chair is satisfied that this bill is in the same form as Bill C-34 was at the time of prorogation of the 2nd session, 37th Parliament.

It has come to our attention, upon examination of the original Bill C-34 and the current bill that was reintroduced, that at page 14 of the original bill, there is a line in section 19(2) and I am reading that entire passage for the Chair, “In addition to any method of service permitted by the law of a province, service of documents on the Senate, House of Commons, Library of Parliament, office of the Senate Ethics Officer”. That is page 14, line 25, section 19(2), and I draw your attention specifically to that line which reads “office of the Senate Ethics Officer”. I now draw the Chair's attention to Bill C-34, the new bill introduced by the government, the same passage, the same section 19(2), line 25, “the office of the Ethics Commissioner”.
The text has been altered. The text is not the same. The bill is therefore not in the same form that it was introduced in the last Parliament, after receiving the assurances of the government House leader who I know passed that information on to the Chair.
I would ask that the Chair examine this inconsistency and review the original ruling that was given by the Speaker on that day.
Mauril Bélanger: Mr. Speaker, certainly we will take a look at that.
If the member is accurate, we will correct the mistake. We have to take a look at that because both the House leader and the Speaker at the time concurred that indeed it was the same.
We welcome this. We will look at it immediately and report to the Speaker of the House as early as this afternoon.
Jay Hill: Mr. Speaker, in light of this, I would like further assurances from the government side on any additional bills it intends to reinstate that the government will be a little more thorough in making sure that they are the same before the government stands in the House of Commons and states such a thing.
Mauril Bélanger: Mr. Speaker, we have been thorough and we have now had a chance to look at this.
The Senate amendments that the member refers to were never received by the House. Therefore, as far as the House is concerned, they do not exist.
The motion for reinstatement says clearly “as approved by this House”. We will double check. It is our belief that the procedure was followed absolutely as it should be. I believe the Speaker will probably be confirming that as well, but we will check again.
The Deputy Speaker: Certainly on behalf of the Chair and the Speaker, I want to give all members of the House every assurance that I will take this matter under advisement. Be reassured that the matter will be scrutinized and the Speaker will again come back to the House and normally I would say if necessary, but it would appear that it will be necessary. That matter will be dealt with very early into our proceedings next week.

Routine Proceedings
Corrections and Conditional Release ActMauril Bélanger: 
moved for leave to introduce Bill C-19, an act to amend the Corrections and Conditional Release Act and the Criminal Code.

(Motions deemed adopted, bill read the first time and printed)
Committees of the HouseHon. Elinor Caplan (Thornhill, Lib.): Mr. Speaker, I have the honour to present the second report of the Standing Committee on Procedure and House Affairs regarding the review of radio and television broadcasting of the proceedings of the House. If the House gives its consent, I intend to move concurrence in the second report later this day.
Heritage Lighthouse Protection ActGerald Keddy: 
moved that Bill S-5, an act to protect heritage lighthouses, be read the first time.

Mr. Speaker, it is certainly my pleasure to reintroduce and once again sponsor the heritage lighthouse protection act in this session of Parliament.
Pursuant to Standing Order 86.2, I ask that this important bill be reinstated. Actually, it was my belief that it would be reinstated at committee stage.
(Motion deemed adopted and bill read the first time)
The Deputy Speaker: The Chair is satisfied that this bill is in the same form as Bill S-7, an act to protect heritage lighthouses, as at the time of prorogation of the second session of the 37th Parliament.
Accordingly, pursuant to Standing Order 86.2, the bill is deemed read a second time and referred to the Standing Committee on Canadian Heritage.
(Bill read the second time and referred to a committee)
Committees of the HouseElinor Caplan: Mr. Speaker, if the House gives its consent, I move that the second report of the Standing Committee on Procedure and House Affairs presented to the House earlier this day be concurred in.
The Deputy Speaker: Is there unanimous consent?
[Intervention]
Some hon. members: Agreed.
[Intervention]
Some hon. members: No.
PetitionsJohn Reynolds: Mr. Speaker, I am presenting a petition today on behalf of constituents from my riding of West Vancouver—Sunshine Coast who support the traditional definition of marriage. They ask that Parliament recognize marriage as the union of one man and one woman.
Mr. Jim Gouk (Kootenay—Boundary—Okanagan, CPC): Mr. Speaker, my constituents also petition Parliament to pass legislation to recognize the institution of marriage in federal law as being the lifelong union of one man and one woman to the exclusion of all others.
Reed Elley: Mr. Speaker, I have several petitions from constituents across the country.
The first petition is from a number of constituents in my riding. They are asking the federal government to be more proactive in terms of the results of fetal alcohol syndrome and the use of alcohol and that warning labels be affixed to containers of alcohol warning people of the dangers of it.
Reed Elley: Mr. Speaker, I have several petitions containing hundreds of names asking that the government retain the definition of marriage as the traditional definition of the union of one man and one woman to the exclusion of all others.
Reed Elley: Mr. Speaker, the last petition contains over 4,500 signatures from people in my riding of Nanaimo—Cowichan. They are asking that the Canada library book rate not be increased. In the negotiations between the Ministry of Canadian Heritage and Canada Post they ask that the library rate not be increased because of the undue hardship it would place upon rural people and others who count on the library book rate to be lowered to receive these kinds of materials through the mail.
Mr. Andy Burton (Skeena, CPC): Mr. Speaker, I too have several petitions today.
The first one requests that Parliament make the necessary changes to convert open net-cage salmon farms in order to make farm salmon a truly sustainable and healthy food choice.
Andy Burton: Mr. Speaker, I have two petitions that ask Parliament to pass legislation to recognize the institution of marriage in federal law as being the lifelong union of one man and one woman to the exclusion of all others.
Andy Burton: Mr. Speaker, this petition also has several hundred names. The petitioners request that the Canadian government ensure that the Ministry of Canadian Heritage and Canada Post renegotiate the library book rate with no increase and that it be expanded to include all materials loaned by public libraries.
Jay Hill: Mr. Speaker, I have two petitions that I am presenting on behalf of the constituents of Prince George--Peace River today, from hundreds of constituents from all over the Peace River side of my constituency, the cities of Dawson Creek and Fort St. John, and the smaller rural communities of Sunset Prairie, Rose Prairie, Taylor, Toms Lake, Farmington, Prespatou, Altona, Montney, Charlie Lake, Goodlow and Pouce Coupe.
I am very pleased to present these petitions that call upon Parliament to pass legislation to recognize the institution of marriage in federal law as being the lifelong union of one man and one woman to the exclusion of all others.
Mr. James Rajotte (Edmonton Southwest, CPC): Mr. Speaker, it is my honour today to present a petition on behalf of hundreds of people in Edmonton and area who call upon us in Parliament to pass legislation which will respect the traditional definition of marriage, that the institution is that of one man and one woman to the exclusion of all others.
Mr. Bob Mills (Red Deer, CPC): Mr. Speaker, I have three petitions from my constituency of Red Deer. Individuals in the first petition, 312 of them, ask Parliament to pass legislation to recognize the institution of marriage in federal law as that between one man and one woman.
Bob Mills: Mr. Speaker, the second petition, signed by 37 constituents, calls upon the government to reconsider its decision to recognize the approved foreign award.
Bob Mills: Mr. Speaker, the last petition, signed by 26 people, calls upon Parliament to provide Canadians with greater access to natural health products.
Questions on the Order PaperMauril Bélanger: Mr. Speaker, I would ask that all questions be allowed to stand.
The Deputy Speaker: Is that agreed?
[Intervention]
Some hon. members: Agreed.
[Stage Direction]
The House resumed consideration of the motion.
Mr. Rodger Cuzner (Bras d'Or—Cape Breton, Lib.): Mr. Speaker, it is a great pleasure to rise and speak on Bill C-18 here today and to join in this debate.
As we know and as has been stated in the House, Bill C-18 really has two aspects that will be dealt with, one aspect being the continuation of the transfer payments from the federal government to the provinces. The second aspect of this bill will allow the federal government to move the $2 billion that has been identified through the meetings with the federal officials and the Prime Minister, through the premiers to the provinces as well, specifically for health care.
We will look first at the aspect of the legislation that deals with the transfer payments. As we are aware, money flows from the federal government through the provinces in any number of ways. Four main vehicles that the federal government uses to share money with the provinces are: the Canada health and social transfer, equalization, the territorial formula financing, and the health reform transfer. The legislation being put forth today deals with equalization and the CHST.
The equalization program basically ensures that those provinces less able to provide the necessities and the essential services to its constituents are able to draw from the fund. It takes into account the revenues from the prosperous provinces. Everybody pays into equalization and then through the sharing formula it is determined which revenues are able to be taken out of this pot. It is a very complex and complicated five province formula that is applied. Through this formula, the lesser provinces, the provinces less apt to have revenues to provide basic services, are able to draw from that fund. I hold my seat in Bras d'Or--Cape Breton and the Province of Nova Scotia is one of those provinces that is a beneficiary of the equalization payments.
Some of the major inputs obviously come from the bigger provinces. When we look at a province like Ontario, we see that its revenue input is a significant amount of what we base our sharing outcomes on. Looking back and reflecting on the year that Ontario has just gone through, there is going to be somewhat of a change from past years because of the tough year Ontario experienced this year with SARS, the downturn in its tourism industry, and those struggles. This is all going to factor into the formula as well.
The original legislation was signed in 1999. As we know, the reason for the discussion, the debate and this legislation coming forward today is that it is set to lapse at the end of March. Hence, we find ourselves in a situation where the federal government wants to guarantee that the flow of cash to the provinces is not interrupted. We want to reaffirm that.
In effect, this legislation is almost like an insurance policy. Officials for the provinces and the federal government continue to negotiate and get into the nitty-gritty of the new legislation that will be put forward. What we will see, hopefully in the next short while, is that a new formula will be developed or a new agreement will be struck. At that time, legislation will be put forward which will supersede today's legislation. This is almost like interim legislation until the new deal is agreed upon between the federal government and the provinces.
The second aspect or component of this legislation is the transfer to the provinces of the very much needed health care dollars. In January, when the Prime Minister met with the premiers, and even before that, it was identified that if there were a surplus then an additional $2 billion would come from the federal coffers to be shared among the provinces.
I remember the great excitement among the premiers and some of the trepidation when we were not quite certain just what the surplus was going to be this year. We had hoped that we were going to be able to provide that $2 billion and now this legislation will make sure that the $2 billion is there and can be moved to the provinces so that they can apply it to their provincial health care systems.
Here is what we have seen in recent years. In September 2000 a reinvestment was made, with $21.5 billion reinvested in health care to the provinces. That agreement was struck between the federal government and the provinces. The federal government, because it finally got its financial house in order, was in a position where it could reinvest in those essentials that Canadians see as imperative. Obviously health care is something that Canadians take a great deal of interest in and recognize the importance of, and fortunately the federal government was able to reinvest in it in 2000. Subsequently, we have made additional investments in health care.
In my own province of Nova Scotia, when we did make the reinvestment in 2000, there was a particular envelope of money that was peeled out and identified specifically for the acquisition of hospital equipment. We can see that on the ground now back in my own constituency. I look at the Cape Breton regional health care facility, the Cape Breton Regional Hospital, and the recent acquisition of an MRI machine.
Before we made this investment in health care back in 2000, I think there were around 50 MRIs in the country. Right now we have almost 125 MRIs across Canada.
There was further investment in equipment. We have digital x-ray machines in Inverness County, in Richmond County at the Strait Richmond Hospital, and a bone densitometer in Sydney. Health care facilities were able to make these investments because the federal government put money in a specific envelope for the acquisition of health care equipment.
People who used to have to leave home and travel to Halifax for these particular treatments are now able to stay in their own communities and receive the treatments. We were very fortunate that we were able to apply the money there.
And really, what we are able to do through this legislation is provide an additional $2 billion that we will be able to transfer to the provinces for health care. It is entirely up to the provinces how they deal with the moneys through the CHST and through equalization.
We hope that the House will see the wisdom of supporting this legislation. We hope members recognize that when we look at equalization, this legislation offers itself as an insurance policy as we wait for the final agreement between the feds and the provinces. As well, we hope they see the merit in supporting this legislation because it will enable the federal government to get that $2 billion into the hands of the provinces so that we can make that reinvestment in our provincial health care programs.
Benoît Sauvageau: Mr. Speaker, I am pleased to address Bill C-18 on equalization. Even though people have a good grasp of the principle of equalization, I would still like to explain it briefly. It is the transfer of money from the federal government, which got that money from the have provinces that make a somewhat larger contribution to the coffers of the state, to the have not provinces.
However, because of the current fiscal imbalance, this equalization program has suffered many distortions. Programs and places are invented—I will name a few later on—where the money sent to Ottawa can be transferred. This means that the provinces are greatly penalized under the equalization program.
We agree with the principle of Bill C-18, which should be referred to a committee, where a new format for presenting legislation in the House could be discussed.
Of course, we also agree with the proposed health transfer of $2 billion to the provinces. We would go even further and ask that this $2 billion be paid to the provinces on a recurring annual basis. We do not want this $2 billion to necessarily be the set amount, but rather the guaranteed minimum payment.
A few minutes ago, we put the question to the Minister of Finance. Despite larger than anticipated surpluses, the minister refused to promise to pay or to make this $2 billion a recurring payment.
To simplify the equalization principle, I remember that the current Quebec finance minister, Mr. Séguin, used to say that it is like what Robin Hood did: take money from the rich and give it to the poor. Indeed, the equalization program can easily be explained by making a comparison with Robin Hood, who took money from the rich to give it to the poor.
When the time comes to negotiate a new transfer or a new equalization formula, it will be difficult to negotiate because the idea of taking money from the rich and giving it to the less well-off has been perverted by the Liberals, as they adapt and change it.
Their system of equalization is to take the taxpayers' money and give it to their friends. That is what the Auditor General has told us. For 18 months, for 2 years, they—from Jean Chrétien to the current Prime Minister—have been telling us, “We do not know if we will be giving you this $2 billion for health, because we do not know if we are going to have it”.
They did not know if they would have that $2 billion, but they knew they had wasted $1 billion on the firearms registry. They knew they had spent and wasted $250 million fraudulently on the sponsorship program. They knew that they had bought two jets in nine days—that is fast—for $100 million. So far, I am up to $1.35 billion that was not audited by the President of the Treasury Board, not audited by the Minister of Finance, not known to the Prime Minister. No one knew about it, but they held a sword of Damocles over the provinces and said, “We do not know if we will be giving it to you your $2 billion, because things are tight financially this year. You might not be getting anything at all”.
Things certainly are tight when the purse strings are loosened and all the money is wasted. That is where the equalization system breaks down in this government.
I will try to demonstrate that the equalization system works better—and this is what the Auditor General says—for those who have their Liberal Party membership cards and contribute to that party's fundraising campaign.
Here is an example of equalization where money is taken from taxpayers, sent to the federal government and given to party friends, who are told, “Give back 5% to 7% of it”. A public inquiry will allow us to shed light on this amount.
Here is one example. A representation of L'Information Essentielle, the noble Robert-Guy Scully, was involved in this little scam. One of the representatives of his company told us, “We solicited the executive director of Public Works for the Government of Canada to sponsor three different television series”, including one on Maurice Richard.
The executive director, Mr. Guité, agreed and verbally committed the government to funding, which included $7.5 million for a series on Maurice Richard.
I want to ask Fabienne Larouche, Pierre Falardeau, Quebec and even Canadian producers and artists if they ever called Mr. Guité to ask for $7 million for the film, television series or documentary they want to make and if Mr. Guité, or Alfonso Gagliano, called to tell them that there was no problem and the cheque was in the mail. No, it was a bit more complicated than that.
But everything was fine since, after all, it was Robert-Guy Scully. He calls Mr. Guité, who verbally promises him $7.5 million—so far, so good—plus $1.2 million for Le Canada du millénaire and additional funds for a series called Innovation . No less than $8.7 million was granted in one phone call, as part of a verbal agreement.
How does the money change hands? The Auditor General told us she would give us a demonstration in a briefing session in the Standing Committee on Public Accounts, because what is in the report is just the tip of the iceberg. It is so bad, she would have had to write an encyclopedia, instead of a report, on the scandals.
They are taking the money of Public Works and Government Services Canada. This is pretty serious business. In March 2000,. a cheque is cut for $862,000, not to L'Information Essentielle—that would be too simple—but to Lafleur Communications. Lafleur pockets $112,000 of that cheque amount, and cuts another cheque for $750,000 to VIA Rail, which forwards it to L'Information Essentielle.
Why this way? Because when someone wants to do some money laundering, to do some crooked deal or other, cheques must not go from point A to point B. They have to go from A to B, from B to C, and then from C to D. That way they think they will not get found out. But they did, because of their little cut of $112,000.
In January 2000, a cheque for $400,000 was sent via Lafleur, which pocketed a $42,000 cut, x % of which went back to the Liberal Party. This yielded $4 million, not for the entire sponsorship program, but just for one item, the Maurice Richard series.
The Auditor General tells us that, in December 1999, Public Works and Government Services Canada signed a contract with Lafleur Communications for production services worth $862,000, but this contract was intended as reimbursement to VIA Rail. The contract stipulated that $862,000 was for work to be done between December 1999 and March 2000, but the contract was in very general terms and did not specify what work was to be done by Lafleur. Lafleur invoiced PWGSC for $750,000 plus $112,000 commission. Commission for what? For handing on a cheque.
I am sure, Mr. Speaker, that you would like to be able to deliver cheques, at the rate of 2 or 3 a day, if someone paid you $112,000 to pick up a cheque at one point and deliver it to someone at another. I am sure you could do a lot of it, but you would not, because you are an honest man.
An internal investigation by PWGSC indicates that, when that contract was drafted , departmental staff was well aware of the true purpose, i.e. to reimburse a third party, VIA Rail, for part of the funds advanced. The auditor says that this was, in her opinion, a dummy contract awarded by the Liberal Party. Not a matter of taking from the rich to give to the poor, but of taking from the taxpayers to give to one's friends. That is what is happening in this government.
There are other examples in the Auditor General's report. The Old Port of Montreal needs a giant screen. To Public Works and Government Services Canada this is normal, legal and proper. A property procurement program is in place and they need $1.5 million. In theory, we would think the money would go from Public Works and Government Services Canada to the Old Port of Montréal Corporation Inc. Instead, it goes to Lafleur, which pockets the money and writes a cheque to Old Port of Montréal Corporation Inc. That is how it works everywhere.
How is the Liberal Party proposing to resolve the situation now? It is simply saying it will make sure this never happens again. That would be like our justice system deciding, in response to organized crime laundering $250 million, not to punishing the offender, but simply tighten the rules to create more of a deterrent.
What we want is for the guilty parties to be identified. The Prime Minister said that Quebec ministers were involved. We want to hear from them too. Then there would be a better sense of trust and the equalization system, since that is what we are talking about, would be fairer for everyone.
Mr. Rex Barnes (Gander—Grand Falls, CPC): Mr. Speaker, it is a privilege to be here to speak on the equalization agreements and what the federal government is putting in, and that is the $2 billion for health care to the provinces, which have been delayed for some time. Now that these are finally reaching the provinces, they are very happy.
Section 36.2 of the Canadian Constitution commits this Parliament and the Government of Canada to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonable comparative levels of public services at reasonable comparative levels of taxation.
The current structure of the equalization program does not fulfil the constitutional commitment. Premiers and provincial finance ministers have called on the federal government over the past number of years to strengthen this program to ensure it adequately fulfills the commitment. Provinces have asked the federal government to move from the current five province standard to a ten province standard to ensure the program comprehensively includes all revenue sources, particularly user fees and to remove the ceiling.
To date, the only thing that the federal government has done is to remove the ceiling, but provinces have seen no financial benefit. Presently provinces are in discussion with the federal Department of Finance regarding the renewal of the equalization program for a five year period commencing April 1.
While the province of Newfoundland and Labrador has had high expectations regarding the outcome of the renewed discussions, it appears now that the renewal will not result in strengthening the program, and the province of Newfoundland and Labrador firmly believes that we could have a process that would weaken the program. We, as the province of Newfoundland and Labrador, cannot have that, and I know many others provinces in the Confederation of Canada have this concern.
Equalization payments comprise a very significant portion of the revenue for Newfoundland and Labrador. We rely on this funding so we can provide such services as health care, education and infrastructure such as roads and highways. Erosions of revenue because of arbitrary federal decisions put my province at a disadvantage compared to other provinces. Not only is it unable to provide comparable service, there can be absolutely no doubt that it does not have comparable taxes, particularly in the most visible and important tax, personal income tax.
The federal decision to maintain the inadequate five province standard results in $132 million less revenue for my province of Newfoundland and Labrador for the year 2003-04 than if a ten province standard was adopted. The province of Newfoundland and Labrador will endure a shortfall every year as a result of this decision. We need to have the 10 province standard adopted by this government.
The federal decision to exclude 50% of the user fees from the equalization formula costs my province of Newfoundland and Labrador approximately $45 million annually. The small province of Newfoundland and Labrador, which is struggling beyond its means, cannot afford to have this revenue taken from it. The federal government will have to do something for our province of Newfoundland and Labrador and the others provinces within Confederation which have the same problems.
In total, the negative impact on Newfoundland and Labrador of federal decisions which limit the payout under the constitutionally enshrined equalization program could be in excess of $200 million annually. There are concerns that the federal government decision related to the 2004 renewal will further erode the program. This will have a significant impact on our ability to fund programs and offer residents of my province a fair and competitive tax regime.
We all hope that when the federal government sits down and negotiates with the provinces, it will keep in mind the concerns that Newfoundland and Labrador have so we can make the program stronger, not weaker. The $2 billion in health care is a great start, but we have a long distance to go, and I hope the finance minister and health minister are listening to the concerns of all provinces.
The Canada health and social transfer is the federal transfer program which is intended by the Government of Canada to contribute to health, post-secondary education and social services. The province of Newfoundland and Labrador has seen its share of funding under this program substantially reduced over the past number of years, primarily because of the federal government's restraints imposed on the program starting in 1996-97 and because of the province's declining population.
Due to this pressure, the federal government has recently started to put more money back into this program. However this has not been sufficient to offset the rising costs of programs it was intended to support, particularly health care.
Every time we turn on the news we hear the premiers saying that they do not have enough money for health care or for education and not enough money overall to do the required infrastructure. I hope the government will listen to the concerns of the provinces.
In 1994-95, Newfoundland and Labrador received $425 million from the Canada health and social transfer. In 2003-04, the province's cash entitlement is expected to be $367 million. Over the same period, the province's spending on health, education and social services has increased from about $2 billion in 1994-95 to almost $2.7 in 2003-04.
What people have to realize is that our population is getting older and more services are needed. The provinces have to deliver those services. We need the federal government to be more open with its books to ensure that the provinces get the money they require to provide services for the citizens they represent.
It is clear that the federal contribution has not kept pace with provincial spending requirements. It is imperative that the overall level of federal funding for social programs be increased from the current levels. Provinces have called on the federal government to increase the level of funding over time until the share of federal funding is 25% of provincial-territorial health and social expenditures.
I congratulate all the premiers who attended the 2003 first minister's health accord. It was good that they decided to come out united because it opened the doors to co-operation. They can now sit down and talk about the problems and, as a good start, they will receive $2 billion.
However if all the federal government is going to do is sit down and talk and not give the provinces what they rightly deserve, then we will have confrontation. I think we get more by sitting down and talking rather than having confrontations. It is important that the premiers are starting in the right direction. It is now time for the Prime Minister to make sure that he delivers to the provinces what they are rightly due under our Constitution.
Newfoundland and Labrador's share of the $2 billion for health care this year is estimated to be approximately $33 million. That sounds like a lot of money but when we look at the big picture of trying to provide services, it is not very much. We need more and I hope the federal government is listening.
The 2001 census: the population is a big determinant of equalization and CHST. In 2003, revised population data was released which reflected the 2001 census. Those results indicated that previous federal estimates of provincial population had been overstated for the years 2001-02 and 2003-04. This revised population data has resulted in an overpayment to provinces over that period of about $700 million. The impact for Newfoundland and Labrador of this overpayment was approximately $168 million. We need that money. We cannot afford to have the federal government take it back.
The federal government has indicated that it intends to recover this overpayment from provinces. The amount related to 2003-04, $52 million for Newfoundland and Labrador, will be recovered this fiscal year, while amounts related to the previous years, $116 million for Newfoundland and Labrador, will be recovered over the next five years.
It is very important that the federal government listen. It should forgive the money for the provinces because they need it. It is important that they ask where the money is being spent. I think the provinces will return and tell the federal government that the money was spent in the right direction.
Previous administrations over the years in Newfoundland and Labrador have not spent the money properly and as a result the hon. premier, Danny Williams, is in a difficult situation. We need the federal government to come on board, to assist Newfoundland and Labrador, like it has never assisted it before, not for political reasons but to do the right thing.
Larry Bagnell: Mr. Speaker, to ensure that the people who are just tuning in understand this finance related bill, the equalization payments are running out at the end of the federal government's fiscal year, March 31, and we need to put a provision in place. Negotiations are underway to renew them but if the negotiations are not finished in time we need to have a stop-gap measure in place to make sure the provinces continue to get their funding.
The second part allows for the provision of the $2 billion transfer to the provinces that the Prime Minister just announced. I am sure no one would be against that. It is a very high priority among Canadians to transfer this money for health care. Health care is a high priority and I am sure everyone would be in favour of this administrative measure in the bill to transfer that money.
The finance minister is meeting with the provinces and territories later this month to continue the negotiations. People should be secure in the fact that if and when new arrangements are made they will supersede anything in the bill and will be retroactive to April 1 so that any new arrangements will be taken into account.
As the member from Newfoundland just outlined very eloquently, the provinces need the money and we must ensure that the money keeps flowing to the provinces so they can provide the essential services, such as health care and education, to their citizens.
Bill C-18 is an act respecting equalization and it authorizes the Minister of Finance to make certain payments related to health. We also have a motion for the legislation to be referred to committee.
The bill is designed to achieve two goals which relate to Canada's system of federal transfer payments. First, the bill would enable the continuation of equalization payments while the renewal legislation is finalized.
Second, the bill would provide the federal government with the authority to pay $2 billion to the provinces and territories for health, as confirmed by the Prime Minister following the recent first ministers meeting.
As my hon. colleagues are aware, the federal government, in partnership with the provinces and territories, plays a key role in supporting the Canadian health system and other social programs.
The large majority of federal transfers are delivered through four major programs: the Canada health and social transfer, equalization, territorial formula financing and the health reform transfer.
Today's bill deals only with equalization and the CHST. Collectively, these programs represent 2.4% of the nation's GDP. Another way of looking at it, and probably more relevant, is that it constitutes approximately 18% of the Government of Canada's budget. Either way, it is a significant sum of money.
I will not be talking about the territorial formula financing right now. I will be talking about the transfer to the provinces through equalization.
Equalization is a constitutional obligation that ensures that less prosperous provinces have the capacity to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. It is not a program that transfers wealth among citizens.
Payments are unconditional. Receiving provinces are free to spend the funds on public services according to their own priorities. Payments are calculated according to the formula set out in the federal legislation. The formula responds to changing economic fortunes and circumstances of provinces and is designed to measure provinces' fiscal capacity relative to the average fiscal capacity of the five middle income provinces, which forms a threshold or a standard.
The formula puts 33 revenue sources in a basket to measure final capacity. Each province's fiscal capacity is measured relative to the middle wealthy five provinces.
The formula is dynamic and as revenues go up or down over the year, the average moves as does the fiscal capacity of each province. If any province has a good year, that affects equalization and, conversely, if any province has a bad year, that also affects equalization.
If a large province has a bad year, naturally there is a ripple effect. Population movement, as reflected in the 2001 census, also affects the flow of payments.
The good news is that over the past 20 years, with all the ups and downs of all the nation's provinces, there has been a slow but steady decline in fiscal disparities.
I am sure, as a nation, we would all hope for that. I am sure none of us would want to move ahead in prosperity, in our ability to take care of our families, in health care and in education if the rest of our brethren in Canada were not able to progress with us.
At the same time, equalization payments are subject to a floor provision which provides protection to the provincial governments against unexpected and large sudden decreases in equalization payments. The floor limits the amount by which a province's entitlements can decline from one year to the next.
Federal and provincial officials review the equalization program on an ongoing basis to ensure that differences in the capacity of provinces to raise revenues are measured as accurately as possible.
In addition, and central to today's debate, is the fact that equalization legislation is renewed every five years to ensure that the review is undertaken and that the integrity of fundamental objectives to the program are preserved. As I said earlier, that is exactly what is occurring right now.
The last renewal was in 1999, and the current legislation is set to expire on March 31, 2004. Discussions on the five year renewal are underway but may not take place exactly on April 1, 2004, and, of course, we would not want to have a gap in the government's administrative authority just to make these payments.
Briefly, the bill would give the Minister of Finance the authority to make these equalization payments according to the current formula for up to a year in the event that the new legislation is not in place by April 1.
The bill would ensure an uninterrupted stream of equalization payments following March 31. It is basically an insurance policy to ensure the continuation of payments while renewal legislation is finalized.
Passage of the bill will ensure the public services provinces fund equalization program will continue to be protected for the benefit of their citizens. Of course, when passed, the renewal legislation will supercede this legislation. When the full renewal legislation is passed it will be made retroactive to April 1, 2004.
The renewal legislation would ensure that the program remains up to date and that the best possible calculations and data are used to determine equalization payments.
As I indicated, until the renewal legislation is introduced and passed, hon. members should regard the measures in Bill C-18 as insurance to continue payments, given that the impacts on receiving provinces could be very significant without legislation. It really appears just administrative so I cannot imagine anyone here voting against allowing us to continue payments to the provinces.
The second part, as I said earlier, is related to health. It would allow the Prime Minister's commitment to the provinces and territories of $2 billion for health care. This constitutes 1.7% of the nation's GDP.
I could go through all this technical information on the health transfer but I do not think I will because the technicality of this has been well outlined. We just want to continue the equalization payments until a new deal is in place and to transfer the $2 billion in health care to which I am sure no one objects.
What I will do now is reinforce the whole concept of equalization. I think equalization is one of the things Canadians point to as being the greatness of our nation. All Canadians want to see each and every one of us succeed and we help each other. In my community, any time there is a tragedy or an emergency the whole community falls in behind the person or the family with the problem.
The nation works like that when one province has a difficult time. We have a nation that is probably bigger than all of Europe. It covers a huge geographic and demographic area with different cultures and economies. Anything can happen to affect any of those areas. It can be seen even more rapidly in the new global environment. Under those circumstances we want to stick together. We want to progress as a people. We want to ensure that everyone progresses together and that the rising tide raises all boats together.
Canadians are a very compassionate people and that is what equalization allows. We are all proud of that and we will make sure it continues through the bill.
Paul Crête: Mr. Speaker, I rise today to speak on Bill C-18, whose purpose is double.
It is somewhat surprising that, in the same bill, we find one part that finally transfers the $2 billion promised by Jean Chrétien and promised again by the current Prime Minister. This amount really should be transferred one way or another. It is a good idea in itself, but the amount is clearly inadequate. It is rather paradoxical and, I believe, unacceptable that this same bill is being used to extend the equalization agreement.
The equalization period is usually five years, and the current period ends on March 31, 2003. They want to extend it from 2004 to 2009, but without having real agreements with the provinces. It is rather like having an old collective agreement with a few holes and things that need fixing. We would like it to be improved. They assure us that the old agreement will apply for the entire period, unless something new is negotiated.
We would have preferred that the current government had done its homework on time and that we had a new equalization act that included the results of negotiations and agreements with the provinces. But the past predicts the future. We know that the Liberal government has not always kept its word on this.
Today, this is very frustrating. We can see that the surplus for the current year, ending March 31, 2004, will probably be in excess of $7 billion. The former finance minister, who is now the Prime Minister, deliberately underestimated the surplus year after year, and the new Minister of Finance is doing the same thing. On March 31, 2004, at a time when a number of provinces will be in situations where they cannot avoid a deficit, where they will be looking for money to spend on health care, the federal government will have $7 billion.
This is a government that acts as if it were a corporation. It is trying to have the largest profits possible, but it is the only stockholder. I think that the results are not what our society wants. It is true that the government must be well managed, but the bottom line is that, if the surpluses piling up do not make it possible to provide adequate services, there is no sense to it.
Yesterday, Quebec's finance minister was unable to refrain from saying so in the consultations he is holding on his own budget. It is frustrating to hear from farmers and people in social housing or other sectors in committee and see that the Quebec government does not have the money it needs to meet their needs.
Quebec and the provinces shoulder the responsibilities, and they do not have the means to obtain the money. The federal government is not responsible for front-line services in health, education, social housing nor a number of other things such as the current mad cow crisis. The federal government has not listened carefully, or it would have provided adequate funding.
In terms of this bill, we agree with the clause to invest $2 billion, as long as it is understood that this is insufficient. Additional funds are needed, and the federal government has the money. However, equalization, as it exists currently, is not sufficient for Quebec's needs and should be reviewed.
An amendment would have been a good idea. It would be appropriate. The $2 billion for health referred to in the bill should be made a recurring item. In the Bloc's opinion, such an amendment would improve the bill, make it more acceptable and ensure our support for it.
If this were a recurring item, funding would be more secure and dependable. As a result, the provinces would have a guarantee that they will not have to rely on the government's good will from one year to the next. It would be recognition that this threshold must be integrated into the health transfer payments. It would be good to have this in the bill.
We will ask that the bill be split so that these two distinct issues can be considered separately. This will be done in committee. We will likely move an amendment to make the $2 billion a recurring item.
That way, there would be two bills coming back to the House, one which would ensure that the $2 billion is paid to the provinces on a recurring basis and the other, which we will not support as it stands, to renew the equalization payment agreements.
In this part, an additional effort needs to be made over the weeks and months to come. It does not look very professional, in a country like this one, which claims to be a leader in public administration, to be living from hand to mouth. Next month, the provinces will be having to define what sort of budgets they will have for the coming year, and to make five year plans as well. Yet they do not know what they will be receiving from the federal government.
We have memories of episodes in the past when the Government of Quebec, no matter what party was in power, learned in February that it would be $200 million or $300 million under, or $500 million over.
This leads to terrible frustrations. When one learns that there was $500 million more that could have been spent in the previous year, on health for example, one sees a number of needs that could have been met. It would have been put to use if one had known it would be there to use, and people would have been pleased. Worse yet is the situation when amounts are taken away.
As for the part about equalization, it is estimated that a one year extension of the current formula would represent a net loss for Quebec. Consequently, we cannot support this legislative measure that would cause Quebec to suffer. Let us hope our suggestion to split the bill does not fall on deaf ears.
With respect more specifically to the equalization issue, the current formula is extremely flawed. It must be changed as soon as possible. We have been defending this point of view for some time now and we hope the government will listen.
This formula penalizes Quebec, gives the advantage to the federal government and accentuates the fiscal imbalance that has been established and recognized by a commission in Quebec. This commission is considered to be very reputable. It was chaired by Quebec's current finance minister, Mr. Séguin, who, in his current role, has noticed that what he saw in his task force he now sees on a daily basis in his responsibilities as finance minister.
Yet the government has not budged in this area. This would have been a good opportunity for the current government to stand out, but, as in other sectors, it is hard to see the difference between the practices of Mr. Chrétien and the new Prime Minister.
Nothing has changed on the equalization issue. The new finance minister flat out rejected the formula proposed by the provinces, and now we are faced with a no man's land. We do not know what exactly will happen. No solid proposals have been made.
The Bloc Quebecois is calling on the federal government to come back to the table with the provinces as quickly as possible in order to enter into a satisfactory agreement on equalization that would meet the provinces' needs.
If the new Prime Minister is serious about wanting to be more open toward Quebec and the provinces, he has a good opportunity to prove it by quickly negotiating in good faith so that the provinces will have the information they need to prepare their next budgets and plan for the next five years. That is what we would expect from a responsible federal government looking to implement a practice that is different from the one that existed under the former government.
The new administration is currently using the exact same practices the former administration used, and the provinces still have to beg for the money they need, money that taxpayers have paid in taxes, in a very complicated process.
The federal government collects taxes, much more than it needs, and gives a certain amount back to the provinces through the equalization program, but it controls everything. It can decide whether or not it will open the tap, depending on all sorts of conditions.
We witnessed that in the past. When provincial governments are not of the same political stripe as the federal government, the latter turns off the tap just in time. This means that the provincial government does not have the money to table a responsible budget and voters make that government pay the price, when in fact the one that is responsible for this situation is the federal government.
The current Minister of Finance said that the next real formula would be retroactive to April 1, 2004, so that, in the end, no one would lose.
However, at this point, this is still only a promise. There is no guarantee in the bill that the government will live up to that commitment. We do not know when the negotiation will conclude. In the meantime, the provinces have a sword of Damocles hanging over their heads, and this is why the Bloc Quebecois is opposed to the bill in its current form.
The $2 billion health transfer must be paid as quickly as possible and this must become a recurring payment.
However, there is still a lot of work to do as regards equalization. Before we give our support to an equalization formula, we want to make sure that it will benefit Quebec.
Mauril Bélanger: Mr. Speaker, I will be brief, but I wanted to make some comments about what we just heard.
During question period, the finance minister indicated that he will be meeting his counterparts as early as next weekend to try to reach an agreement on equalization. He did not promise that an agreement would be reached, but he did not say either that it would not happen.
We have to give the provincial and territorial finance ministers as well as our own finance minister time to try to reach a new agreement to set up a new equalization scheme and hopefully meet everyone's expectations.
If a new agreement cannot be reached before the end of March, that is at the end of the current fiscal year, we would find ourselves in a situation where the current program would expire. The bill before the House would extend the equalization program for an additional fiscal year, under the same terms and conditions, so that we can continue operating without any problem. However, should an agreement be reached, it could be retroactive to the beginning of the 2004-05 fiscal year.
I do not see why some people are against this bill, since we have said that we are willing to talk with the provincial governments, with our finance minister's counterparts, to determine if an agreement is possible. There is no other way about it.
If we do not want the equalization payments to stop, then we need some kind of interim measure. This is what we are proposing, all the while hoping that a new five-year equalization agreement can be reached so that provinces can more adequately plan their operations.
I do not understand why there is so much opposition to a bill that is so badly needed and would not hurt anyone.
Marcel Gagnon: Mr. Speaker, I will start by responding to what I have just heard. This is a very strange way to view things, in asking the provinces to sign an agreement before they can even negotiate it. It is like asking workers not to strike and to sign a collective agreement, in hopes they will agree with the employer. If an agreement with the provinces is to be reached, it must be done before the expiry date and there must be negotiations.
References have been made, for example, to the $2 billion for health. How long have we heard about this? Mr. Chrétien promised this amount, for part of last year, and this promise is being repeated. They say that to invest $2 billion in health, the equalization agreement has to be renewed for another year. This is false.
The Bloc Quebecois is asking that the federal government fulfill its obligations and give the $2 billion for health care. The bill can be split with regard to this issue. We are asking that this $2 billion be made a recurring item. It makes no sense to try to administer a province without ever knowing what will happen.
For example, Quebec, like the other provinces, is responsible for health, education and municipal affairs. It needs to know what funds it will receive. A new equalization agreement must be signed before the old one expires, so that we know what will happen under the next agreement.
However, if one law says it can be renewed for one or five years, this puts the provinces in a tight spot. They agree to what the government wants, or else the current system is renewed. This is not a logical way to work. Our system is one in which the federal government must give money to the provinces; therefore, both parties must agree.
Last year, the House hardly sat. Nothing was accomplished. Now, the bills we should have considered last fall are being reinstated one by one. Due to internal problems in the ruling party, the House did not sit. Now, the government wants to reinstate everything at the last minute, no matter what may happen to those suffering from its incompetency, as the provinces are suffering with regard to equalization.
The request of the Bloc Quebecois is quite logical. This $2 billion for health was promised a long time ago. Please, give us the money. We can split the bill. We all agree, everyone agrees with that part of the bill, and we would even want it to be a recurring item. It is quite a significant amount.
Last year, during the whole summer and autumn, we were told that the government was not sure it would have enough money to hand out this $2 billion. The government wanted us to believe that it was almost in a tough financial situation, but we now realize that there will be a $7 billion surplus. All this goes to show how hypocritical they can be. Why can they not tell the truth for once?
We are looking for the truth not only about the sponsorship scandal, but also about what is happening with equalization. I agree with what our critic said on this issue. We do not sign blank cheques. We want the bill to be split and we want to get the money for health that is owed to us under the equalization program, and we want it to become a recurrent item. We would support that part. However, let us go to the negotiation table as soon as possible. Let us not put a knife to the throats of the provinces and coerce them into signing a deal that would be similar to the current one. If we go about it this way, the provinces would not be pleased and would feel once again that they have been had.
I sat for nine years at the National Assembly of Quebec and I know the administration problems the provinces have when they do not know what transfers they can expect. The amounts owed to the provinces do not belong to the federal government, but rather to the provinces and are needed to help them discharge their obligations.
It is not logical to feel that one is at the mercy of the federal government and that they always arrange things so one is at a disadvantage in negotiations.
I am therefore totally in agreement with the Bloc Quebecois position on this and am convinced this position is shared by all the provinces, Quebec in particular of course, because we have heard that Mr. Séguin is calling for the same thing we have been saying here.
What I find deplorable about this government is the lack of justice in its legislation or in the way that legislation is applied. Someone this afternoon referred to equalization payments as they are seen by the Liberal Party over there. Among other things, it is the money involved in the sponsorship scandals which finds its way to the party's campaign funds without anyone being responsible. They saw nothing, yet half a billion dollars changed hands, and one hundred million of that half billion changed hands in an indirect manner. A strange kind of transfer payment, that.
I invite people to look into the contributions to the Parti Quebecois and the Bloc Quebecois. These are public and bear no resemblance whatsoever to the contributions to the Liberal Party. I know that because I have worked in Quebec, as I said, and have had to work within the stringent rules of Quebec's legislation and we had moral standards, unlike the federal public service and the federal government.
It is, for instance, scandalous to see that seniors are being deprived of money, as are the unemployed. Only 39% of those currently out of work can collect employment insurance. Their fund has been taken over. That is another transfer payment in favour of the federal government. They helped themselves to $45 billion from the EI fund, money that belonged to workers. Not one red cent of it belongs to the government.
I do not want to hear anyone try to tell me that it is the same thing in Quebec. That is not true. The Government of Quebec has had some things to answer for, but never a scandal such as the one we have here. There are even some people on that side who are so scandalized that they dare not speak. Someone has said it is totally beyond him. What is really beyond me is that it is difficult, if not downright impossible, to get at the truth.
There is a word I would like to use, but it would be unparliamentary. Therefore I will not use it. Another word that should be considered unparliamentary is the word truth. We have very little opportunity to hear that word. What is happening defies logic.
The fact that we are constantly before a government that takes every opportunity to help its friends and then shirks responsibility if a problem arises, make no sense. They are the only ones who had not heard about what was going on, while in our ridings, everyone had. Agency representatives in my riding were shocked at what they had to do in order to get a sponsorship. It is quite unbelievable.
At any rate, we are talking about equalization. I know I have somewhat belaboured the point, but we can all agree that this equalization formula is unacceptable. With respect to the current agreement, I think it would be logical to meet with the provinces to negotiate as soon as possible in order to resolve this problem. Legislation could be passed after the negotiations, not before. The provinces should not have to renew the former agreement for another year or another five years because the government says so.
Hon. Dan McTeague (Parliamentary Secretary to the Minister of Foreign Affairs, Lib.): Mr. Speaker, I wish to comment on the remarks by the Bloc member who has just spoken. He made the point that certain things were scandalous.
I think this is an interesting statement from a member who sat in the National Assembly for nine years as a member of the Parti Quebecois; he is a member of a party that wants to divide a great county like Canada. We are talking about equalization between the federal and provincial governments. We know he was a member of a party that never wanted to share its money with the big cities.
[Intervention]
Some hon. members: Oh, Oh.
Dan McTeague: Even though I am a member from Ontario, I understand very well that the Bloc Quebecois and its friends have always had problems in years past. They have always had problems. Yes, I touched a raw nerve there. They do not like to hear about certain things. Yet, hypocrisy is not something that happens on only one side of the House. How easily the PQ and the BQ forget that the provincial government's record shows that Quebec's cities were ignored.
And so I think it is a bit sad, perhaps, but quite unreasonable for them to take this position here—
[Intervention]
An hon. member: Even to amalgamate them.
Dan McTeague: Even for the question of amalgamation. We know very well why the people, our friends in Quebec, got rid of their government.
As for the position being taken, we must be reasonable. The position taken by the government is to find ways to ensure that the money goes to benefit everyone in the country, whether they are in Ontario, Quebec, or the Maritimes. This money has to come back in order to sort out the troubling things we are finding at present, that is ensuring that there is enough money to meet commitments.
We must not do as the Bloc Quebecois wishes and create divisions. That is their philosophy: to create rifts between the other provinces and cities.
Still, I find what the hon. member about seniors and the least well-off interesting. I was the vice-chair of one of the committees examining this question. Their party was opposed to changes in the pharmaceutical patent regulations that could have lightened the financial burden on veterans and retired people.
With regard to the people who must use these medications, the Bloc protects the industry rather than the interests of seniors, people who have fought for our country and who built a country that the Bloc should be ashamed of trying to destroy.
Suzanne Tremblay: Mr. Speaker, I am pleased to speak in this debate on Bill C-18 and the side issues. It is an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.
My good friend opposite was letting off steam and having fun. However, I think the true hypocrisy is on that side of the House across from us. A bill like this one smells of an election. Every time an election is on the horizon, the government always manages to put forward a bill that opposition parties are often forced to vote against. There is always something in the bill that does not make sense.
This time, the government could very well have paid out the $2 billion for health. If a bill were needed for that, to say that this sum should be put into a trust, as clause 6 suggests, a simple bill with very little in it would have sufficed for paying out the $2 billion.
The Liberals will be able to travel across the country, and particularly in Quebec, during the election campaign and say, “The Bloc Quebecois voted against the bill that provided $2 billion for health”. Nonsense. We are opposed to the fact that, over a period of five years, this government did not manage to negotiate equalization.
Earlier, the government chief whip and deputy House leader told us that the Minister of Finance had made a promise. When we see that ministers opposite have no memory, we cannot really trust their promises.
When we see in the bill, under clause 3, that payments are extended to March 31, 2005, without any mention of this retroactivity to April 1, 2004, we do not believe the Minister of Finance; we no longer believe this government. It has fooled us too often in recent days. We can no longer trust it.
So, a proper amendment must be included in a clause to point out that the new equalization formula will be retroactive to April 1, 2004. We cannot take any risk. If there is no retroactivity, Quebec, among others, will lose $1.5 billion. We cannot run that risk. If this formula is going to be retroactive, then let us put it in writing in the legislation. It does not cost much to include these things. Why not do it? We cannot put our trust in a promise.
What is important, as the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques pointed out, is to split the bill in two. Let us vote on the amount of $2 billion. Everyone here agrees with it. Then, the government should propose the equalization formula with an important amendment, namely the guarantee that the formula will be retroactive to April 1, 2004. If we do not have that guarantee, logic tells us to vote against this legislation. It is simple. The Liberals think they are doing fine with their majority, but they only have the support of 38% of the voters. Incidentally, I am curious to see the next poll.
I am not sure that many Canadians are proud to be Liberals today. I am not sure at all. They will have trouble finding candidates to run against us in Quebec. More and more people are hiding the fact that they are Liberals. It is a shame to have a government that would not stand for taxpayers, but would rather look out for itself, its own party, its friends and its growing bank accounts.
Again, this bill is only a parody of democracy that would have us believe that the government is generous. However, in the last five years, the former finance minister who is now Prime Minister could not reach an agreement with his provincial counterparts about an equalization program criticized by all of the provinces.
It is not only Quebec but all of the provinces that are criticizing the equalization program.
The chief whip told us that we would come to an agreement before March 31, 2004. Who does he think we are? Take a good look at me, I am no dummy. What they are doing does not make any sense. They could not come to an agreement in the last five years, but they are now sure they can make a deal within a month. It does not make any sense.
I urge the government to seriously reconsider the issue. And if the Prime Minister is really serious about a new approach to governance, a new way of doing things, he should stop acting like the previous government did and he should be more transparent and tell us exactly how things stand.
Monique Guay: Mr. Speaker, I do not know if I am going to be as eloquent as my colleague was, but I will try to express my point of view, which is very similar to that of all my colleagues here in this House.
I think that we have been in politics long enough and we have seen enough bills before this House to realize that this bill deals with two totally unrelated issues.
As my colleague mentioned, if we have to pass a specific bill to put these $2 billion for health in a trust, then let us do it.
But here, the government is tricking us by rolling two bills into one. It is trying to get us to swallow this when it knows perfectly well that we will not go for it.
We agree about the $2 billion. All the members would vote in favour of a bill dealing exclusively with this issue. There would be no problem; it would pass in a flash. The members opposite know that, and this is why they are trying to get us to swallow another equalization bill.
As my colleague already said, we cannot accept that. We cannot accept this bill as is. We want it split and sent back to committee. Once it is split, we will be able to consider the first part and deal with the issue of the $2 billion.
We have been talking about these $2 billion for a year. Right now, people in hospitals are waiting, emergency rooms are clogged, it is just crazy. In my community, Saint-Jérôme, ER patients have to be sent to other hospitals because of the overload.
Send us the $2 billion and stop toying with us. It is just ridiculous. The time is now. We need that money and we know what to do with it. Do not worry, when it gets into the provinces' pockets, whatever government they have in place, the money will go directly to health care, directly to the people.
What is the government waiting for to give them the money? It is toying with us again. How long will it take to pass this bill? It is just making things more complicated.
When my colleague talked about retroactivity, she was entirely correct. This is not in the bill. Will it be agreed to in committee? If not, obviously we will vote against this.
Furthermore, it is not true that negotiations will take one month because the parties have been trying to reach an agreement for five years. Not one province considers the equalization formula, in its current state, to be fair and equitable. Consequently, we are told, “We are going to propose this just in case”.
This is an election bill because we are headed for an election. So, they are taking advantage of the situation to delay things for one year, without any retroactivity. This is dishonest for the public and the provinces.
[Intervention]
An hon. member: It is misrepresentation.
Monique Guay: It is misrepresentation and such behaviour is unacceptable. We are told that it will be our fault if this bill is not passed. The $2 billion is being held over our heads like the sword of Damocles. It is totally illogical.
For once, the government could have acted quickly and clearly. There are people who need the money the government collects from provincial taxpayers. We need only look around today to see that people are getting poorer. Only 39% of workers have access to employment insurance. What about the rest? Where do they go? They get social assistance. We know just how poor people on social assistance are. It is hell.
So the problem is offloaded on the provinces. If we do not have equalization to help us, to help those people get back on their feet and go back to work, to create jobs and pay taxes that benefit the government, then this problem will continue. That is why we need equalization.
The government should start to manage its affairs properly, to work harder, put an end to the scandals and clean house. It must clean house. It is unbelievable; I have never seen anything like this before. It is shocking.
In my riding office, the telephone never stops ringing. People simply cannot believe what is going on here.
It is not very good for politicians, whatever party they belong to, to see how money was handed out right and left to someone's buddies. It is not right and it must stop. And let no one tell me that the Prime Minister did not know. I absolutely do not believe that and I can say that the voters of Laurentides do not believe it either.
Let them put their house in order. When they have the chance to do something good, let them do it and do it right away. They should stop telling us that they are going to put things together and mix things up so that, later, they can say that we voted against the $2 billion.
The voters of Quebec are very pragmatic and they will realize why, if this bill is not divided, we will oppose it. They will understand that equalization negotiations must be retroactive for Quebec. We cannot afford to lose this money; we need it. We administer most of the programs, not the federal government. We need that money. This must be in the bill.
Clearly, I hope that amendments will be made in committee. I hope that, for once, the government will accept amendments that are logical and reasonable, and that we will finally be able to vote in favour of a sensible bill. But as it stands now, it is clear we cannot support it.
In conclusion, I would like to say that I also wish the bill could be divided, so that the $2 billion can quickly be put to a vote and sent to the provinces to help us fix our problems in health care.
Mauril Bélanger: Mr. Speaker, is the motion deemed to have been adopted or is the vote being deferred until Tuesday?
The Acting Speaker (Mr. Bélair): No other members wishing to speak to this topic, is the House ready for the question?
[Intervention]
Some hon. members: Question.
The Acting Speaker (Mr. Bélair): The question is on the motion. Is it the pleasure of the House to adopt the motion?
[Intervention]
Some hon. members: Agreed.
The Acting Speaker (Mr. Bélair): I declare the motion carried.
(Motion agreed to and bill referred to a committee)
Mauril Bélanger: Mr. Speaker, I rise on a point of order. There have been discussions among all the parties and I believe if you ask, you would find unanimous consent to allow the debate on mad cow disease, which was held February 4, 2004, to continue, pursuant to Standing Order 53.1, up until 2:30 p.m. today.
The Acting Speaker (Mr. Bélair): Does the hon. deputy government House leader have the consent of the House to proceed in such a fashion?
[Intervention]
Some hon. members: Agreed.
Jay Hill: Mr. Speaker, I rise on a point of order. Will the debate be in the same format as the take note debate from last week where we were in committee of the whole, or will we use the normal procedure?
The Acting Speaker (Mr. Bélair): The government House leader brought this matter in under Standing Order 53(1) which deals with an emergency debate. Therefore, we will not go into committee of the whole.
All the speeches will be 10 minutes long. Time can be shared. There will be no questions or comments.
Suzanne Tremblay: Mr. Speaker, should there not be a 10-minute period for questions and comments?
The Acting Speaker (Mr. Bélair): The hon. member for Rimouski--Neigette-et-la Mitis is right. The speeches are 20 minutes long followed by a 10-minute period of questions and comments. The time can be shared.
[Stage Direction]
The House proceeded to take note of the issue of Bovine Spongiform Encephalopathy.
Jay Hill: Mr. Speaker, I wish to indicate that I will be splitting my time with my colleague from Skeena. As I understand it, it will be the standard procedure, where we have 10 minutes of remarks followed by five minutes for questions and comments.
First of all, it is appreciated, certainly by the official opposition, the Conservative Party of Canada, that we have this opportunity to bring the House up to speed on the situation in our own ridings, and to present the case for some immediate action above and beyond what little the government has done on this file.
I can tell members that the situation in all of Canada, certainly in western Canada with which I am most familiar, is grave. That goes for Prince George--Peace River, a prominent cattle country part of Canada. In the Peace River region, on the east side of the Rocky Mountains, we have a large grain and livestock producing region. Likewise, in and around the Prince George area, and down in the McBride area that will be added to my riding under boundary redistribution, there are a lot of cattle farmers and cattle producers of both cow and calf, and feedlot operators. The situation has reached or passed crisis proportions.
We have family businesses that in some cases have been in business for two or three generations. They are virtually on the verge of losing all their equity and going out of business. It is that serious.
I can tell members that the average Canadian out there needs to understand the seriousness of this issue. This is not a case of the member of Parliament for Prince George--Peace River standing here and crying wolf. This is serious business and I want to make that abundantly clear today. When we have a situation where individuals have struggled not for one lifetime but in some cases for two or three lifetimes to build up a business, and they are on the verge of losing it through no fault of their own, it should send a chill up our spines.
This is not a case where somebody made a bad business decision. This is not a case where they overextended themselves or they wanted to take a holiday and go to Hawaii rather than reinvesting their money. These people have their backs to the wall, and I would argue that the government, while recognizing it in rhetoric, has done precious little to alleviate their pain in order that they may be in a position to pay their bills.
These are proud people. When we look at the history of the nation, cattle producers have very seldom come looking for assistance from government. They are independent people. But my God, their backs are up against the wall this time. They have had to come and say that they need some help to get over this hump, and if we want a cattle industry in Canada, they need some help.
I can tell members of the outrage in Prince George--Peace River over the last number of days, when it became clear that $250 million had been blown out the window with this sponsorship program at the same time that people were losing their farms, their ranches and their feedlots. There is a growing anger across this land, and I hope the government is listening.
What has changed since last Wednesday? What have we heard from the Minister of Agriculture and Agri-Food? What have we heard from the new Prime Minister? What have we heard from the government that would indicate a ray of hope for the cattle industry in Canada since our take note debate held last Wednesday night, participated in by members of Parliament from all parties including government members who spoke very eloquently and passionately about the plight of farmers in their ridings, as well as they should?
Regardless of what party we represent in the House, first and foremost I would argue that we represent real people in real situations, whether we are from the back country of Ontario or northern British Columbia where I come from. These are real people with real problems and they are suffering right now.
What has changed since our take note debate? Has there been any ray of hope? I would argue, no. I have not seen anything. No one follows the news closer than members of Parliament. Every day we get news clippings and we scan them to see what is happening, not only here in Ottawa but across the land so that we are kept up to speed about what is happening in our regions, our provinces and in the country as a whole.
I have not seen anything coming from the government from last Wednesday that would indicate to the people in my riding or elsewhere that there is a ray of hope or that we are going to turn a corner with this crisis. That has to be extremely depressing and troubling for these farmers and ranchers as they struggle with this crisis day-to-day.
It is not just one or two individuals. It is families and in many cases, young families. I cannot imagine what it is like for those young children to come home to the farm or ranch right now and see the look of anguish on the faces of their parents as they struggle with what they must believe is hopelessness. They are looking for a little bit of hope from the government and they are not getting it.
Despite their best efforts, farmers are now facing an added catastrophe. They are running out of feed for their animals because their business was not built upon having these animals feed all winter long. Anybody who understands the first thing about animals and about agriculture and farming knows that in cold weather an animal eats a lot of feed to maintain its body heat to keep it sustained when it is outside in minus 20° to minus 30° weather.
Some of these farmers have had a real struggle to get good quality feed for the winter and now they find that the animals that would have gone to market are still on the farm because they are virtually worthless. Farmers have to scrounge up the feed. It must seem to them that they are pouring this money down a bottomless pit with no hope on the horizon.
I think we all understand what is necessary. It is necessary for the government to make the admission here and now that the program it has put in place is a great disappointment. It is a failure. The government must recognize that. The money is not getting through to the people who need it. Farmers have not seen any increase in their income so that they can sustain their operations for the short term to hopefully get over this hump. We need an immediate cash infusion.
I heard that last Wednesday night from all parties, including the governing party and I certainly hear it all across the land. I implore the government to revisit this issue and find the money to support our cattle producers instead of putting it into sponsorship programs.
Dan McTeague: Mr. Speaker, I am happy to ask a question of the hon. member for Prince George—Peace River. He speaks for all of us in the House in terms of the seriousness that he attaches to this issue. He has properly and appropriately described the conditions that many people who are proud, strong and supportive Canadians find themselves in through no fault of their own with eloquence and forcefulness.
The member has delved into other areas, but I will not deal with those. However, I want to ask the hon. member if in his opinion there might be a way of addressing a formula that might help these farmers? And I say so with all candour.
I do not have a riding with a lot of beef producers, but I would like to ask the hon. member, is it possible for us to do something more as far as it relates to the price that farmers are now forced to get for their cattle and of course the prices that are charged in the stores?
Many consumers in my riding are still amazed that the money they are spending on beef is not getting back into the hands of the people who so desperately need it as we speak. Could the hon. member provide the House some insights in terms of his understanding of this issue in order to help a very difficult situation notwithstanding?
Jay Hill: Mr. Speaker, I appreciate the comments made my colleague across the way. As he says, he does not represent a riding that has cattle producers, cattle farmers and ranchers in it, but he recognizes that he represents a lot of people who I am sure eat beef. That is why it is as important to him as it is to his constituents.
I want to start out my response by paying tribute to Canadian consumers. By God, they really dug deep and tried to do what was right in this crisis. Canadian consumers from coast to coast looked at this situation and at least partially recognized the seriousness of it, even though they might not have lived on farms themselves or might not have understood it. They understood that it was serious enough that they wanted to do something, as the hon. member stated. What we saw was a fairly dramatic increase in the consumption of beef in Canada.
Unfortunately, as he has stated, which is accurate, it has not related to either a drop in the consumer cost to encourage even greater consumption to use up more beef or a return to the farmer. Whatever beef consumption went up, all that happened was the middle people, the packers and the supermarkets, said that there was no need to put the price down to encourage more consumption because it was supply and demand and as long as people were buying lots of beef, they would keep the price up.
Did it filter through to the farmer? No. Quite the opposite has happened. The price has continued to slide to the point where, as I said earlier in my remarks, cows are practically worthless.
Our very serious concern is that any program or money put in place has to go directly to the farmers, whether it is in the form of paying them to cull their cattle or whatever. It cannot go to the middle people. Also it has to offset to a large extent the fact that the cow is now worthless. If it does go to the middle people, the price that the packing plants or the feedlots will to pay the farmer will be correspondingly lower because they know the farmer is getting some assistance from the taxpayers and the government.
That is the dilemma and irony of the situation. Consumers tried their best to help out farmers by increasing consumption, but it is not filtered through to the farmers.
Paul Crête: Mr. Speaker, I listened carefully to what my honourable colleague had to say, and I would like to ask him a question about the impact of this crisis on the next generation.
Yesterday, I visited the Institut de technologie agricole, in La Pocatière, along with the leader of the Bloc Quebecois. We met with about 15 students, interested in various areas of the farm industry. We listened to their needs and asked them what the future holds for them in agriculture. They kept asking us what exactly the federal government intends to do to reduce their incredibly high debt load to a more reasonable level.
Dairy farmers, whose extra income from cull cows often represents 20 to 25% of their total farm income, told us, “What we are losing now is what used to pay my own wages, or what used to be my father's wages”. What can we expect?
With another $7 billion surplus this year, should the federal government not put into place a more humane approach to prevent people from moving away from the farm? People who have lived all their lives on the farm are now losing their savings.
Should the federal government not take more drastic measures? Should it not set up a new program to provide assistance to beef producers and milk producers for whom this is an important source of income?
Should we not expect some kind of financial assistance from the federal government first to deal with this problem and then to promote economic renewal?
Jay Hill: Mr. Speaker, yes, as I noted in my remarks, I think there is general agreement on both sides of the House. I do not know why there has been continued inaction on this file on the part of the government when many of its own members have expressed the same empathy for the producers and the same concern for their constituents as we have on this side.
It seemed to me, in listening to the take note debate last Wednesday evening, that there was virtual unanimity in the chamber on the need for an immediate cash infusion to sustain the backbone of our beef industry in Canada. Therefore, yes, there is.
He asked what effect this has. I think all of us recognize that there is a growing average age of farmers in Canada. Farmers are getting older and older because less and less young people are farming, and it is because of situations like this. They do not see any hope. Why would young people stay on a farm trying to eke an existence basically on the equity that their fathers and grandfathers have been able to build up when there does not appear to be a very bright future for farmers in Canada. Part of that I would blame on the government across the way.
Dan McTeague: Mr. Speaker, I want to again thank the hon. member. I know that we only have a few minutes here, but I have had a chance to speak to the member from the Bloc.
It seems to me that there was a concern raised by some of us here, and that was in part the question of the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques. Is it possible, short of the cash issue which the producers are facing right now, that we also encourage in the House a sixth person complaint to the Competition Bureau? I am not sure of the mechanism with which to do it. I understand from the member from the Bloc that the Competition Bureau refused this, but it seems to me this is the second time it has happened.
I do not think it is earth shattering. I think there is a certain amount of concern about concentration at the retail level, particularly as it relates to groceries. Part of the problem that is exacerbating the situation for our good farmers is what is happening beyond the farm gate.
I wonder if it might be possible for the member to discuss with his members on the industry committee about giving strong consideration to perhaps a section 9 complaint under the Competition Act to ensure that at least something is being done while a decision to help and to compensate is being considered.
Jay Hill: Mr. Speaker, my understanding is that the mandate of the Competition Bureau would have to be redrawn, because as it has said that there is nothing in its present mandate that prevents any company from making an exorbitant profit. Just because these companies do not see fit to lower the price because consumption has actually gone up, there is nothing the Competition Bureau can do. I think that will have to be addressed.
The second point I would make quickly on this is that anything like that will not help in the short term. It might solve the problem if we were to, God forbid, end up in a situation like this in the future to redraw some of that type of legislation.
I need to re-emphasize this as my last statement today. The fact is farmers need the help now. They needed it yesterday, not tomorrow and not today. It is crisis time.
The Acting Speaker (Mr. Bélair): I would like to make a correction concerning the mistake that was made twice earlier today.
If we are going to resume the take note debate that we had last week on mad cow disease, the proper procedure would be to have a 10 minute speech, followed by a 10 minute period for questions and comments. This is what I just did with the last hon. member who spoke.
Suzanne Tremblay: Mr. Speaker, I am pleased to rise during this take note debate. I received a number of calls from producers in my region who are understandably very concerned about the situation, and who find the way things are going to be somewhat unfair.
The moment that one case of mad cow disease was discovered, the American border was closed. The border was going to reopen, but a second case was discovered. Immediately, and without any evidence, the Americans claimed that the cow was from Canada. Unfortunately, once the evidence was in, it was confirmed that the second cow also came from Canada. Consequently, the border, which was to reopen in January, has remained closed.
It is high time we took a serious look at the impact of this mad cow situation on us. It is unacceptable that in Canada, whose area is so vast that it could include 10, 12 or 13 sovereign countries, people in the east are affected by what is going on in the west or, conversely, that people in the west are affected by what is going on in the east. We should have greater autonomy.
What is surprising is that when chickens are slaughtered in the southeastern United States, the border is not completely closed to American chickens. Chickens from the west continue to be shipped. But if the situation were reversed, I wonder if we would have permission to export our chickens. For example, if chickens were slaughtered due to bird flu, for example, in Ontario. Probably, the entire border would be closed.
What producers want, at least those in my region who talked to me, is for us to find a way to restore public confidence, confidence in exports and of importing countries. How can we do this?
Europe has decided to test all animals slaughtered. It would be an extremely costly measure if we decided, tomorrow morning, to test all animals slaughtered in Canada. We have decided to randomly test 30,000. This measure seems insufficient to restore the confidence of importing countries in our production.
It is possible, using DNA testing, to identify pork sold on supermarket shelves and verify if that animal could have a problem.
Quebec has a tracking system too but the Canadian government is not really interested in what Quebec is doing. I used to be my party's agriculture critic. I sat on the Standing Committee on Agriculture and each time I talked to producers, they said, “If only Canada would adopt some of the same agricultural practices as Quebec”. Obviously not all its practices, but some; Quebec does things differently than Canada, and this is quite an advantage in light of what is happening in the rest of the country.
Since this is a Quebec solution, people will say that it is not good for Canada. What they are trying to do instead is to bring Quebec in line with Canada, but rather they ought to be allowing us our specificity, and making the policies in use in Quebec, which are avant-garde, efficient and productive, a model for Canada.
That way we could continue to cross-pollinate our ideas, so as to improve the situation in agriculture, rather than spend all of our time and energy battling a government that wants to prevent us from doing things our way and to impose its made-in-Canada approach to agriculture on us, without realizing that it may not necessarily suit us.
What is unfortunate is that, in my opinion, over the 10 years I have been here, we have never managed to find an agriculture minister who appeared to have an understanding of what was going on in Canadian agriculture. Odd, that. Yet one of them was even a farmer himself. The one in the portfolio now comes from a farming region. Strangely, one might think that they lose any ability to understand agriculture as soon as they become minister.
A person does not have to be a genius to realize that agriculture is different in Saskatchewan, in Alberta, Manitoba, B.C., Quebec and Ontario. Our climates differ. Our snowfalls differ. Our rainfalls differ. Our dry spells differ. Our exposure to the sun differs, because the earth is round, so we do not all get our sunlight at the same angle. They appear to doubt that. We are not all at the same angle to the sun all the time.
So there cannot be one wall-to-wall agricultural policy. It has to be adapted to each province. If one province works well in one area, the others should be ask to adopt that approach. They will be encouraged to use the same method. The government needs to decentralize agriculture more, instead of trying to have a one-size-fits-all approach, and to think that agriculture is the route to Canadian unity.
That is not how Canadian unity works. “This little piggy went to market” has to be the way to productivity, not unity. So if there are problems, we need to sit down and seek solutions together. All the steps being taken now are nothing but stop-gap measures. Here, we will give you $450 million, or $500 million or $200 million, and think the problem is solved.
That is not the way it works. We need the creativity to find solutions. We need to properly identify the problems, see where they are, and find solutions.
I see that the border with the United States is still closed. They have promised us better relations between Canada and the United States. It does not look as if things are working better between the Prime Minister and Mr. Bush, because nothing has changed on the mad cow issue. Nothing has changed on softwood lumber. Nothing has changed about any of the problems we have with the Americans.
Nevertheless, I hope that Ottawa will soon be in discussions with the provinces to decentralize things and to find sustainable solutions to economic issues, rather than thinking that this year they will hand over $200 million to solve the problem, and next year find another $200 million.
Problems are not solved by throwing millions of dollars at them. Producers must be able to live. Producers must be in a position to know that their efforts will be rewarded in the end, and that they will continue to be able to export their products abroad.
If a producer's domestic market collapses because there is a monopoly, for example, such as one slaughterhouse for all of Quebec, then let a second one be opened to encourage competition, if that is what it takes to increase the prices received by producers.
Solutions must be found. Our colleague proposed the Competition Bureau. They probably cannot do any studies. What I think is important is that we find solutions that suit the nature of the problems, once they are examined in detail.
Marcel Gagnon: Mr. Speaker, I listened carefully to my honourable colleague and I found what she had to say to be very interesting. Of course, we have to use such a crisis to find medium- and long-term solutions.
I would like to ask the hon. member a question about the current situation. Some of my constituents have told me, for instance, that at 58 or 59 years of age, they are now at the end of their working life and thinking about retiring. Their farm, assessed at $1 million at one point in time, is now almost worthless. This is a financial emergency. In Quebec, as my hon. colleague knows, desperate people have killed themselves because of their financial problems.
While medium--and long-term solutions are being considered, would my hon. colleague not agree with me that the government should act now to try to help those who, at least for now, and let us hope for not too long, have lost hope, because this crisis has cost them too much and they cannot see the light at the end of the tunnel? Does the hon. member not think that we could quickly find some money to assist these people at such a terrible time in their lives?
Suzanne Tremblay: Mr. Speaker, I thank my colleague for his question.
It seems clear that there was an announcement that at the end of the fiscal year, the government would have a $7 billion surplus. We are talking about a lot of money--$7 billion is not peanuts. Some $2 billion was promised for health, which leaves $5 billion. The government still wants to keep a $3 billion cushion for unexpected problems such as SARS, floods and the mad cow crisis. The mad cow crisis was unexpected.
I agree that we have to be able to find solutions for the short term, but we must also consider the medium and long terms. Always focusing on the short term means we will always be up against it. This is where the difficulties begin because people are not left with much hope.
I was agriculture critic during the scrapie problem. This too was a catastrophe. Yet, we were under the impression that things were under control, perhaps because fewer people raise sheep than cattle and we have dairy stock in Canada.
This time farmers are facing huge difficulties. What they want is for the government to do whatever is necessary so that consumers regain confidence in their products and they can start exporting again as soon as possible.
It is clear that herds in Canada have not been fed animal-based feed since 1997. It has been six years. So why could it not be agreed that cattle 30 months old or less could easily be exported? There is no risk whatsoever that these animals could have been contaminated.
It seems to me that the necessary effort is not being made to help restore confidence. The borders are closed, so we do nothing. If others closed their borders to us, we should do the same to them. I do not see why we should continue to be so generous with others if they cannot be generous with us.
In the short term, we must obviously find money to help people, to prevent bankruptcies, to avoid a situation where young people would be unable to take over from those who have reached the age of retirement. Indeed, as my colleague pointed out, I know people who do not have much in front of them right now because they receive about 6¢ a pound for their cull cows. My colleague from the Conservative Party of Canada mentioned that prices have not gone down at the supermarket, but that has not given anything more to producers.
There is something wrong that should be fixed to the satisfaction of producers. I think that everyone of us here is aware of the fact that, when the day comes that we have to import everything because farmers here are longer be able to produce, it will be too late to wake up.
Larry Bagnell: Mr. Speaker, I would like to congratulate all those at home watching CPAC and also those in the galleries. Even though we have a very complex legislative schedule with a lot of debate and reports that have to be communicated in Parliament, we can take time out when there is a national issue such as this one and work on it with all parties. I think all parties are providing helpful solutions and part of my comments will show that.
The member made a very good point. She mentioned that it is very important to have a qualified minister of agriculture. It is serendipity that just before this crisis came up the Prime Minister appointed one of the most--if not the most--knowledgeable people in the House, with experience in working with other people. He was the chair of the Standing Committee on Agriculture and Agri-Food. He had just finished consulting across the country on the Prime Minister's task force.
The member opposite made the point that nothing has changed nor is there success in the relationship between the President of the U.S. and the Prime Minister. However, that is not accurate. We know that when the Prime Minister took over, right away there was a change in the contracts available to Canadians in Iraq. I was surprised myself that we were that successful. I do not think I would have been bold enough to push for that. This was a great victory for Canada.
I will speak about BSE and why the present minister of agriculture--
The Acting Speaker (Mr. Bélair): I do not know if the parliamentary secretary noticed, but we were on questions or comments. I think the member is into a speech.
May I ask the member for Rimouski--Neigette-et-la Mitis to comment on what the parliamentary secretary just said or should I ask if there is another question or comment?
Suzanne Tremblay: Mr. Speaker, I would like to make a brief comment. The hon. member rose and I thought he would put a question to me. He began by congratulating us for debating an urgent national issue in the most elegant way, with all the parties involved.
What he did then is to praise the Prime Minister. The member's timing is off. He is totally off base. I do not understand why he would make such comments. I thought he had a question. I am a little disappointed that I did not get him more interested in my comments.
Larry Bagnell: Mr. Speaker, this is questions or comments and I was making three interesting comments. Of course my comment on the Prime Minister's good work was in response to the member's comment.
The third comment I wanted to make was on the initiative that the minister, along with the members for Tobique—Mactaquac and Medicine Hat, took by going to Asia to meet, first of all, with Japan and Korea, because their acceptance of our beef is part of our problem with the United States, our biggest consumer.
The members went there and worked together. They talked about how the international review panel had reported on Canada. The Japanese gave us some ideas on what we could do to help get our beef back into Japan, which was very helpful. Then they went on to the United States, our biggest customer, of course, and met with American and Mexican officials to help improve the situation. All these efforts have certainly helped the situation. This is all work in progress on a very difficult issue.
Suzanne Tremblay: Mr. Speaker, it is very difficult to comment when there is no question.
I would like to say that I have two major problems in my riding, namely dairy production and softwood lumber. Unfortunately, the Liberals are going around telling people that these issues are not solved because I am a Bloc Quebecois member. In fact, all the problems that we have remain unsettled because of the ministers' inability to solve them.
The Minister for International Trade has spent three years travelling to the United States to try to find a solution to the softwood lumber issue. He finally left the file to his colleague. He did not solve anything. And nothing was solved either in agriculture.
If ministers can get to work and stop parading around, we may find a way to settle the issues that confront us in our ridings.
Andy Burton: Mr. Speaker, I am not sure that I am really pleased about having to speak to this issue. This issue is something that should have been resolved a long time ago as my colleague from Prince George--Peace River said earlier. The industry is in a crisis and there does not appear to be a quick resolution coming from the government.
My riding of Skeena is a fairly northern riding which runs from the Yukon border down the central coast and about 200 miles inland from Prince Rupert. The Smithers-Hazelton area is an agricultural economy as well as forestry and mining. There is dairy farming and a fair bit of beef cattle ranching so BSE is an issue. The new riding boundaries that presumably will be in place fairly shortly will take my riding inland another 150 miles which gets into some fairly major cattle country in the Vanderhoof area.
The BSE issue is a big concern to me and it is a big concern to people in my area. There is no question that action is needed but it has not been forthcoming from the government. The people in my riding are urging the government to deal with this serious issue.
Last Monday I was in Houston, B.C. for the opening of Canford's new sawmill addition. It will be the biggest sawmill in the world. I realize I am a little off the topic but I will get to the point. This sawmill will produce some 600 million board feet of lumber a year, enough to build some 30,000 homes. As members can see, the forest industry is very important in northwestern B.C.
At that session I spoke with the mayor of Smithers, Mr. Jim Davidson, who is a cattle rancher. I had met with him previously and also with the Bulkley Valley cattle ranchers association. He impressed on me once again how serious this problem is. As my colleague said earlier, family businesses that have been built up over several generations are on the verge of bankruptcy. There does not appear to be any hope for them unless something changes very quickly.
The value of cattle is basically at zero. The equity that the banks were lending money on was basically on the value of cattle which were saleable at one point in time. However there is no value there anymore. The banks are walking away from these people. It is creating huge problems in terms of people meeting their loan payments and so on. There are huge costs in terms of feeding the cattle over the winter. The cattle should have gone to the feedlots last fall. People are facing an accumulation of problems and it is almost impossible for them to deal with them. Without some hope, some help and some direction from the government, they will give up. We cannot allow that.
The cattle industry is important to my riding. It is important to British Columbia. It is important to Canada. The cattle industry is worth some $35 billion. It does not make any sense to let it collapse.
The government to date has done very little. People out there are angry and desperate. There is no doubt this will be reflected at some point in the near future. There has been no change since the debate last Wednesday. All parties have agreed that this is a serious problem. The minister needs to take action, not today, not tomorrow, but yesterday. Action is not happening and we have to ask why on behalf of the cattle producers of Canada. Why is there no positive action and positive results? What do we do about this? Obviously there are solutions and we have to start addressing the problem sooner rather than later.
We have to rebuild our relationships with the U.S. There are some problems in dealing with trade issues right now. The softwood lumber issue has been going on for a number of years and no end appears to be in sight. Now there is the BSE situation. There was one animal in Alberta and one in the U.S. which unfortunately came from Alberta. It is a huge problem.
The two governments need to arrive at a method that will deal with these trade issues expeditiously. They cannot continue dragging them out week after week, month after month, year after year. The softwood lumber industry paid the price and now our beef cattle producers are paying the price and they will not be able to pay it for too much longer. We need action on this right away.
This should be seen as a scientific issue. We should be putting money into research and resources in the longer term to come up with a solution so this does not happen again, but we also need a short term solution so the industry can continue and survive.
Canadian consumers have supported this industry. I think we are consuming as much beef as we possibly can as a nation. However given the number of cattle in Canada we obviously cannot consume them all. We need to have access to the U.S. market.
An interesting point was raised just a little while ago. Our Canadian army in Afghanistan is destroying thousands of kilograms of U.S. beef. The Canadian army actually eats U.S. beef. With our beef industry in the situation it is, regardless of how the army contracts or how it does its supply to the troops, it seems very strange to me that our troops overseas would actually be eating U.S. beef. I just wanted to point out how ridiculous the government's position is and how it has not been useful in resolving this problem.
The Canadian people are proud of the beef industry and they support it to the best of their ability. Our government must recognize that support and pride and it must recognize that our beef farmers need direct support. The support does not need to go to some middle man where the farmers do not see it on their bottom line. The bottom line is that this industry must survive in Canada and it is up to this government today to find a solution.
Cheryl Gallant: Mr. Speaker, the people in my Ontario riding of Renfrew—Nipissing—Pembroke are also in a desperate situation. The president of the Ontario Federation of Agriculture called me the other day saying that the auction barn was a very dismal place and that people were having to reach into their pockets to pay the commission fees because after selling their animals there was no money left over. He said that people were at the point of having to shoot their cattle but that they had no place to bury them.
Knowing that my colleague's producers are in the same situation, I wonder if he could tell me what his producers are doing to get rid of the animals they have had to shoot because they have no food left to feed them.
Andy Burton: Mr. Speaker, frankly, it is a huge problem. There is a certain amount of local market for cull cows, and so on, that they have to get rid of. One can buy a whole beef pretty darn cheap right now anywhere in northern British Columbia, if not all across Canada.
However that is not the solution. There are no slaughterhouses in my area so they cannot ship to a slaughterhouse to get rid of at least some of it.
The bottom line is that there is no easy solution for our producers. Again, it just points out the need for the government to deal with this issue immediately.
The Acting Speaker (Mr. Bélair): It being 2:30 p.m., the House stands adjourned until next Monday at 11 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 2:30 p.m.)